Why does the IRS allow larger depreciation amounts in the early years of an asset's life?
A)The calculations are easier if you allow more depreciation in the early years of an asset's life.
B)The government wants to encourage companies to invest in assets to promote economic renewal and growth.
C)So that most income taxes are paid by average taxpayers,rather than by big corporations.
D)The calculations are more complicated,so it provides more jobs for accountants and thus stimulates the economy.

Question

Quizplus · Accepted Answer

One of the behaviors the government wants to encourage is economic renewal and growth.Thus,the IRS allows companies to deduct larger amounts of tax depreciation in the early years of an asset's life than what GAAP allows.

Why Does the IRS Allow Larger Depreciation Amounts in the Early