CONSTRUCTION-EQUIPMENT POLICY: INFLUENCE OF INCOME TAX LAW ON ECONOMIC LIFE

STUDY WAS TO CONDUCTED TO EXAMINE THE INFLUENCE OF THE TAX LAWS ON THE MATHEMATICAL MODEL PREVIOUSLY DEVELOPED BY THE AUTHOR IN HIS TECHNICAL REPORT NO. 61. THE TWO PRINCIPAL INFLUENCES OF THE TAX LAWS ON THE ECONOMIC LIFE OF CONSTRUCTION EQUIPMENT ARE (1) THE PROHIBITION AGAINST USING DOUBLE DECLINING BALANCE DEPRECIATION FOR AN EQUIPMENT LIFE OF LESS THAN THREE YEARS, AND (2) THE STIPULATION THAT A PIECE OF EQUIPMENT SHOULD NOT BE DEPRECIATED BELOW A REASONABLE SALVAGE VALUE. EQUATIONS HAVE BEEN DEVELOPED TO SUBSTITUTE STRAIGHT LINE DEPRECIATION FOR LIVES OF LESS THAN THREE YEARS AND TO RECAPTURE INCOME WHEN THE ASSET HAS BEEN DEPRECIATED MORE THAN A REASONABLE ALLOWANCE. THE CONCLUSION OF THE REPORT IS THAT INCOME TAX PROBLEMS CAN BE TREATED IN THE COMPUTATION OF ECONOMIC LIFE BY DIGITAL COMPUTER. BY MODIFYING THE ALGORITHM IN TECHNICAL REPORT NO. 61 WITH THE EQUATIONS DEVELOPED IN THIS REPORT, THE ANALYST IS PROVIDED WITH AN ADDED TOOL FOR DETERMINING THE ECONOMIC LIFE OF VARIOUS TYPES OF CONSTRUCTION EQUIPMENT. /AUTHOR/

  • Supplemental Notes:
    • Tr No 69, 29 PP, 6 FIG, 1 TAB, 7 REF
  • Corporate Authors:

    Stanford University

    Stanford, CA  USA  94305
  • Authors:
    • DOUGLAS, J
  • Publication Date: 0

Subject/Index Terms

Filing Info

  • Accession Number: 00215265
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 3 1970 12:00AM