Deductions & credits

Equipment is under Machinery. Both the equipment and the trailer are 7 year property.

Is a trailer considered a vehicle for depreciation?

Their cost must be capitalized and recovered through depreciation. Because truck, trailer, and tractor tires are not considered part of the vehicle for depreciation purposes, they are not associated with any of the specific transportation assets included in the specific asset classes of Rev. Proc.

For tax purposes, there are six general categories of non-real estate assets. Each has a designated number of years over which assets in that category can be depreciated. Here are the most common:

• Three-year property (including tractors, certain manufacturing tools, and some livestock)
• Five-year property (including computers, office equipment, cars, light trucks, and assets used in construction)
• Seven-year property (including office furniture, appliances, and property that hasn't been placed in another category).

They are all entered in the Asset section.