In example involving Book reporting. @ 7:56 the account of A is reduced by $20 to reflect the loss incurred from depreciation. I don't understand why.... Even if A is able to deduct $20 as a loss against other income which is taxed at the 25% tax rate.... that would only be a net benefit to A of $5.00 (not the full $20 A's capital account is reduced). If I'm A, why would I want to take the depreciation loss?
Thanks for your comment. This is the accounting consequences, not tax. Remember tax and accounting are different so you have to look at them separately.
