The IRS Does Not Require the Taxpayer to Use the Same

question 229

True/False

The IRS does not require the taxpayer to use the same depreciation method on the tax return that is used in preparing financial statements.

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Definitions:

Financial Statements

Reports that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Held-to-Maturity Debt Securities

Debt investments that a company has the positive intent and ability to hold until their maturity dates, typically reported at amortized cost.

Fair Value Method

An accounting approach where assets and liabilities are reported at their prices that would be received to sell an asset or paid to transfer a liability.

Cost Method

An accounting method where investments are recorded at their acquisition cost without considering market value changes unless a permanent decline in value has occurred.