Variations on MACRS
The normal MACRS depreciation tables are
the most commonly used and generally the most favorable to taxpayers,
because they provide for the largest possible deductions in the earliest
years. However, you do have the option of using slower depreciation
methods.
While normal MACRS uses a 200 percent declining balance
method for 3-, 5-, 7- and 10- year property, there is also a 150 percent
declining balance method that is available as an option for most business
owners, and that must be used for all farm property, and for
all nonfarm property in the 15- and 20-year property classes. Most
often the 150 percent declining balance method is used for the same
recovery periods as normal MACRS, but you do have the option of using
the longer ADS recovery periods as described
below.
Normal MACRS uses a straight-line method for real estate,
which is property in the 27.5- or 39-year class. However, you can
also choose to use straight-line depreciation for any other property,
if you wish.
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Warning Generally, if you exercise your option
to use any of the variations of MACRS, you must use it for all assets
of the same class that you placed in service during the year. Once
you make the election you cannot change it. |
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For more information on using any of these alternative
MACRS methods, and for the tables showing the applicable depreciation
percentages, see the IRS's free publication 946, How to Depreciate
Property, available on the Internet at the IRS web site or by calling
1-800-TAX-FORM.
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