Groups of Assets
If you place more than one asset of the same type into service during the
year, and the assets are in the same class, with the same recovery period, and
use the same depreciation
method, you can elect to group the assets into a "general asset
account." For example, if you purchase five computers to use in your
business in 2002, you can create a general asset account for them.
This basically means that you will treat them as a single asset for
depreciation purposes. You can only do this for assets that are used 100 percent
for business in the first year you place them into service.
Although the general asset account can simplify your
recordkeeping, it can also cause problems if you sell one, but
not all, of the assets in the group before the end of the
recovery period. In that case you might have to recognize the
full amount of the sales price as ordinary income (not the sales
price minus the tax basis of the item, as in the usual case).
You would continue to depreciate the entire group of assets for
the remainder of the class life, including the asset you've
Be sure to check with your tax advisor if you think you want
to use a general asset account for large, relatively expensive