I'm taking an accounting course. What I'm learning is that there are two different measures of accounting, one for investors and another one for taxes. And, from what I'm learning, they are both legal and required by law. Rewind a few years, and I remember that the left-wing media was howling over Donald Trump keeping two sets of books, one for investors and one for tax purposes. And they were acting like it was wrong and that Donald Trump was cooking the books. Wrong! I'm seeing more applications of investor vs. IRS reporting more and more in my accounting course. There are two different systems in effect. Donald Trump was right to have one set of books for investors and another one for tax purposes. Not only was he right, but it was his legal duty. This has left me with the impression that the left-wing media was completely ignorant of accounting principles at best and guilty of downright malicious misinformation at worst!!
I'm going to link to a video from my course on tax reporting of depreciation. It's an 8.5 minute video. I have no idea if it will stay up after my course ends in a few weeks, but for now you can see what I'm talking about. Income Tax Considerations To summarize, investors use GAAP (Generally Accepted Accounting Principles), and the government uses MACRS (Modified Accelerated Cost Recovery System) for calculating depreciation.
