Hi. Should I track depreciation of fixed assets for company valuation purposes even if I expensed them for tax purposes in the 1st year? E.g., current value of tractor.

@498399 

If this is a corporation or a partnership, there is a schedule on the tax return to reconcile book to tax profit. That is where depreciation claimed for tax purposes but not for book purposes, would be a reconciling item.  The government provides investment incentives so that fixed assets can be fully expensed before their useful life has ended, which leads to a misstatement of the reasonable value of the assets of the business, which seems to be what happened here. Even if this is a sole proprietorship, the same principle applies.  So it makes sense to depreciate the asset based on the estimated useful life, not on what the IRS allows.  There are generally accepted principles for estimated useful life.  I believe for vehicles it is 5 years, so depreciation would be 1/5th every year, using the straight line method.