In computing NESE, a taxpayer can take a reasonable deduction for depreciation. Most
types of tangible property (except land), such as buildings, machinery, vehicles,
furniture, and equipment are depreciable. Similarly, certain intangible property,
such as patents, copyrights, and computer software is depreciable.
Usually, we do not question the amount of depreciation shown on a tax return. If an
item of depreciation raises questions of validity, develop further.
For more information about deductions for depreciation, see IRS Publication 946.