What are the advantages of depreciating an asset?
Most people are usually motivated to get the greatest deduction that they can in any given year, so the ability to expense under Section 179, the purchase of an asset, is appealing to many more than just depreciating. But there may be a point where you chose depreciation over what we call the expensing election. One thing that comes to mind is if you have a corporation, for example, and the corporation already has a loss. If you claim the expensing election of Section 179 depreciation you won't be able to use it. You'll have to carry it forward. So if you choose the regular depreciation option, you can actually increase your loss. If you happen to be an owner of a personal service corporation that zeroes out income every year, if you take a year end bonus or salary and generally don't have an income, you may not be able to deduct Section 179 depreciation, that's the depreciation you write off all in one year, because that depreciation can't increase a loss or create a loss. But if you opt for a regular depreciation over the asset's normal life, you may in fact be able to create a loss in the corporation. So there are rare times when regular depreciation might actually be preferable.
