 So retired from service. You can stop depreciating property when you retire it from service even if you have not fully recovered its cost or other basis. You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because any of the following events. So note if you retire it, if you just like throw the piece of equipment away, you're not going to sell it, then you might say, well that's not good because I still had some of the adjusted basis in place that I could have depreciated it if I held on to it. But if you dispose of it, you might still get a benefit from disposing of it for the amount that had not yet been depreciated in the form of a loss when you make a disposal which is calculated similar to like if you sold it, but you had no sales price there. You just disposed of it. Sales price zero cost adjusted basis loss the difference between the two. So you sell or exchange the property. So you convert the property to personal use that would be a similar situation is no longer used for business. It's personal. If you sell it, then you're not going to depreciate it anymore. At that point in time, you're going to calculate your gain or loss on sale. If you abandon the property, you just leave. If it's like real estate, that's usually what comes to mind with an abandoned property. You just leave it abandoned the poor forklift into the middle of somewhere. You transfer the property to supplies or scrap account. So your accounting for it is just scrap now as opposed to like a piece of equipment. It's not a forklift anymore. So it's a hunk of metal and the property or the property is destroyed. In which case, again, that would be similar to like you sold it. You just you lost it, right? It's gone now. So these would be similar to a sales type of transaction, but you didn't get any money for it. So you might have a loss. So you don't really lose that adjusted basis. So in other words, if you bought a hundred thousand piece of equipment, you've been depreciating it. There's still 30,000 that hasn't fully been depreciated at the point of time that you abandoned the property, you throw it away, you destroy it or something like that. That would be similar to like a sale happening. You'd still get a benefit possibly of that 30,000, but not in the form of depreciation rather in the form of a loss possibly from from it. Okay, so what method can you use to depreciate the property terms you may need to know. So you can may need to know the adjusted basis we talked about a little bit before the basis. That's like the cost and the adjusted cost convention. What kind of convention are we using for depreciation exchange intangible property we've looked at before non residential real property placed in service when was it placed in service the equipment related persons. So we often have these related person issues residential rental property salvage value. How much of it is it still worth at the end of the life when we do our calculations section 145 property section 1250 property. So what type of property is it the tax code charge to calculate it in these different boxes to help us determine what we need to do with it from basically an accounting and tax standpoint standard mileage rate when we're talking about automobiles and comparing depreciation methods or standard mileage straight line method that's the baseline methods you want to keep in mind as the ground basis for how depreciation works and then we deviate from there with all this other weird stuff they do to it unit of production another depreciation method useful life how long is this dang piece of equipment going to be around how do we calculate that usually we're subject to the tax code telling us how to calculate that oftentimes. So you must use the modified accelerated cost recovery system otherwise known as good old makers m a c r s. So when you think of makers you might if you know accounting methods for depreciation you've got straight line then you've got double declining balance and so on that makers is usually a form of double declining balance although it has like a half year convention usually but it depends also on the type of property that we're dealing with. So so that's what they're going to call it so we have to we have to use we don't as we do on normal bookkeeping we don't get to pick the method that we're going to use that best applies to to allocating the proper amount over the useful life given our best estimate but instead we've got to use what the tax code tells us to use and usually we're talking makers oftentimes so makers is discussed later chapter four if you want to check it out in the publication you cannot use makers to depreciate the following properties so property you placed in service before 1987 so we had possibly different rules acres prior to that point in time certain property owned or used in 1986 intangible property films videotape and recordings certain corporate or partnership property acquired in a non-taxable transfer property you elected to exclude from makers so generally if we're putting something on the books like now and going forward makers is usually you know the the the method that we're going to be putting in place these are the exceptions