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Michael Hannigan
Michael Hannigan, Consultant
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Experience:  25+ Years in the field
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Im trying to figure out the price depreciation schedule (month

This answer was rated:

I'm trying to figure out the price depreciation schedule (month by month) over two years, for products in the following categories:
o Furniture (e.g. Couch)
o Home electronics (e.g. Flat Screen)
o Home Appliances (e.g. Blender)

XXXXX XXXXXnigan :

Hello. I can assist you with your question.

XXXXX XXXXXnigan :

There isn't a 2 year recovery period defined. The shortest period is 3 years for certain items. All schedules are outlined in the IRS Publication 946.


 

XXXXX XXXXXnigan :

If you go to page 16 of the document, however, you will see that there are some exceptions where the property can be taken as a deduction for the year it was placed into service under section 179

XXXXX XXXXXnigan :

Please let me know if you have any questions.


 

Customer: replied 4 years ago.

Hi Michael,


 


I'm actually looking for something that gives me a sense for how these values change month-over-month, as per my question. E.g. when I buy a couch, how much can I sell it for after 1 month (and then up to at least a year). I've seen the IRS depreciation schedules before, but they don't provide enough detail.


 


The answer doesn't have to be perfect, but it has to be within a shorter time frame. Do you know how to answer this question?

Yes, I understand what you are asking.

This would be how an insurance adjuster would calculate the value of an item. There are various resources for this. One of them is the calculator on this page:

Depreciation Calculator

There is also a PDF guide on that page.

From a yearly depreciation scedule, it would be possible to break down months, although it's not often calculated that way.

Mike
Customer: replied 4 years ago.

Hi Michael,


 


Thanks this is a lot more helpful. My only issue is the month by month isn't really an accurate estimate of what happens to a couch's value from 0 to Month 1. Do you have any creative suggestions for estimating how an ACTUAL crate and barrel couch for example, changes in value month-by-month for the first year.


 


I'm definitely going to rate your response highly and submit payment because the answer above technically answers my question, but was hoping you would have some input as to how to get to a more realistic estimate.


 


Thanks!


Krista

There are a couple of ways you can do this. The method you use is fairly subjective. One way is to take what you think is a fair yearly depreciation amount, multiply it by a factor (usually 1.5-2), divide that by 12, and then apply that percentage to the remaining value of the item (value of the item equalling original value - total depreciation).

So, let's say you decide that the value of a couch will decline about 10% per year based on the calculator. 10%*2 is 20%. 20%/12 is 1.67%. So this is how that would work out.

Original Value $2000

1 month $1966.60 (2000-33.40 (1.67% of 2000))

2 months $1933.76 (1966.60-32.84 (1.67% of 1966.60)

3 months $1901.47

4 months $1869.72

And so on...

This gives you a more accurate value for the item at any given time. Throw it into a spreadsheet and it looks like this.

 

Attached Spreadsheet

 

MonthDepreciation %Depreciation AmtValue
00.00%$0.00$2,000.00
11.67%$33.40$1,966.60
21.67%$32.84$1,933.76
31.67%$32.29$1,901.46
41.67%$31.75$1,869.71
51.67%$31.22$1,838.49
61.67%$30.70$1,807.78
71.67%$30.19$1,777.59
81.67%$29.69$1,747.91
91.67%$29.19$1,718.72
101.67%$28.70$1,690.01
111.67%$28.22$1,661.79
121.67%$27.75$1,634.04
131.67%$27.29$1,606.75
141.67%$26.83$1,579.92
151.67%$26.38$1,553.53
161.67%$25.94$1,527.59
171.67%$25.51$1,502.08
181.67%$25.08$1,476.99
191.67%$24.67$1,452.33
201.67%$24.25$1,428.07
211.67%$23.85$1,404.23
221.67%$23.45$1,380.77
231.67%$23.06$1,357.72
241.67%$22.67$1,335.04
251.67%$22.30$1,312.75
261.67%$21.92$1,290.82
271.67%$21.56$1,269.27
281.67%$21.20$1,248.07
291.67%$20.84$1,227.23
301.67%$20.49$1,206.73
311.67%$20.15$1,186.58
321.67%$19.82$1,166.76
331.67%$19.48$1,147.28
341.67%$19.16$1,128.12
351.67%$18.84$1,109.28
361.67%$18.52$1,090.76
371.67%$18.22$1,072.54
381.67%$17.91$1,054.63
391.67%$17.61$1,037.02
401.67%$17.32$1,019.70
411.67%$17.03$1,002.67
421.67%$16.74$985.92
431.67%$16.46$969.46
441.67%$16.19$953.27
451.67%$15.92$937.35
461.67%$15.65$921.70
471.67%$15.39$906.30
481.67%$15.14$891.17
491.67%$14.88$876.29
501.67%$14.63$861.65
511.67%$14.39$847.26
521.67%$14.15$833.11
531.67%$13.91$819.20
541.67%$13.68$805.52
551.67%$13.45$792.07
561.67%$13.23$778.84
571.67%$13.01$765.83
581.67%$12.79$753.04
MonthDepreciation %Depreciation AmtValue
00.00%$0.00$2,000.00
11.67%$33.40$1,966.60
21.67%$32.84$1,933.76
31.67%$32.29$1,901.46
41.67%$31.75$1,869.71
51.67%$31.22$1,838.49
61.67%$30.70$1,807.78
71.67%$30.19$1,777.59
81.67%$29.69$1,747.91
91.67%$29.19$1,718.72
101.67%$28.70$1,690.01
111.67%$28.22$1,661.79
121.67%$27.75$1,634.04
131.67%$27.29$1,606.75
141.67%$26.83$1,579.92
151.67%$26.38$1,553.53
161.67%$25.94$1,527.59
171.67%$25.51$1,502.08
181.67%$25.08$1,476.99
191.67%$24.67$1,452.33
201.67%$24.25$1,428.07
211.67%$23.85$1,404.23
221.67%$23.45$1,380.77
231.67%$23.06$1,357.72
241.67%$22.67$1,335.04
251.67%$22.30$1,312.75
261.67%$21.92$1,290.82
271.67%$21.56$1,269.27
281.67%$21.20$1,248.07
291.67%$20.84$1,227.23
301.67%$20.49$1,206.73
311.67%$20.15$1,186.58
321.67%$19.82$1,166.76
331.67%$19.48$1,147.28
341.67%$19.16$1,128.12
351.67%$18.84$1,109.28
361.67%$18.52$1,090.76
371.67%$18.22$1,072.54
381.67%$17.91$1,054.63
391.67%$17.61$1,037.02
401.67%$17.32$1,019.70
411.67%$17.03$1,002.67
421.67%$16.74$985.92
431.67%$16.46$969.46
441.67%$16.19$953.27
451.67%$15.92$937.35
461.67%$15.65$921.70
471.67%$15.39$906.30
481.67%$15.14$891.17
491.67%$14.88$876.29
501.67%$14.63$861.65
511.67%$14.39$847.26
521.67%$14.15$833.11
531.67%$13.91$819.20
541.67%$13.68$805.52
551.67%$13.45$792.07
561.67%$13.23$778.84
571.67%$13.01$765.83
581.67%$12.79$753.04
MonthDepreciation %Depreciation AmtValue
00.00%$0.00$2,000.00
11.67%$33.40$1,966.60
21.67%$32.84$1,933.76
31.67%$32.29$1,901.46
41.67%$31.75$1,869.71
51.67%$31.22$1,838.49
61.67%$30.70$1,807.78
71.67%$30.19$1,777.59
81.67%$29.69$1,747.91
91.67%$29.19$1,718.72
101.67%$28.70$1,690.01
111.67%$28.22$1,661.79
121.67%$27.75$1,634.04
131.67%$27.29$1,606.75
141.67%$26.83$1,579.92
151.67%$26.38$1,553.53
161.67%$25.94$1,527.59
171.67%$25.51$1,502.08
181.67%$25.08$1,476.99
191.67%$24.67$1,452.33
201.67%$24.25$1,428.07
211.67%$23.85$1,404.23
221.67%$23.45$1,380.77
231.67%$23.06$1,357.72
241.67%$22.67$1,335.04
251.67%$22.30$1,312.75
261.67%$21.92$1,290.82
271.67%$21.56$1,269.27
281.67%$21.20$1,248.07
291.67%$20.84$1,227.23
301.67%$20.49$1,206.73
311.67%$20.15$1,186.58
321.67%$19.82$1,166.76
331.67%$19.48$1,147.28
341.67%$19.16$1,128.12
351.67%$18.84$1,109.28
361.67%$18.52$1,090.76
371.67%$18.22$1,072.54
381.67%$17.91$1,054.63
391.67%$17.61$1,037.02
401.67%$17.32$1,019.70
411.67%$17.03$1,002.67
421.67%$16.74$985.92
431.67%$16.46$969.46
441.67%$16.19$953.27
451.67%$15.92$937.35
461.67%$15.65$921.70
471.67%$15.39$906.30
481.67%$15.14$891.17
491.67%$14.88$876.29
501.67%$14.63$861.65
511.67%$14.39$847.26
521.67%$14.15$833.11
531.67%$13.91$819.20
541.67%$13.68$805.52
551.67%$13.45$792.07
561.67%$13.23$778.84
571.67%$13.01$765.83
581.67%$12.79$753.04
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