Straight-line depreciation ESTIMATE
Spread a depreciable cost evenly over the useful life you choose for the books.
Result ESTIMATE
Even slices of the depreciable base
Straight-line depreciation for the books takes cost minus salvage value and divides by useful life. A machine that cost $12,000, with $2,000 expected salvage and a 5-year life, depreciates $2,000 a year. If it was in service for 6 months of the first year, this page takes half of that, $1,000. That month-count is a bookkeeping convention you choose and apply consistently. It is not the IRS half-year convention.
Annual depreciation = (Cost − Salvage) ÷ Useful life
Partial year = Annual × (Months in service ÷ 12)
Books and the tax return can differ
Federal income-tax depreciation for most tangible business property uses MACRS, not the useful life you would pick for a management report. Land is not depreciated. Inventory is not depreciated. The MACRS lookup uses the half-year percentages in IRS Publication 946 and asks you for the basis left after any section 179 or bonus depreciation you are actually allowed to claim. Do not paste this straight-line result onto Form 4562 and assume it matches.
Keep the support
The cost is the invoice, freight, and installation you capitalized — not repairs you expensed. Salvage is an estimate, so write down why you picked it. The annual entry is a debit to depreciation expense and a credit to accumulated depreciation, which is the contra-asset on the balance sheet. The expense lands on the profit and loss. It is not a cash outflow, so it does not change cash runway by itself.