Tab 1
Whats New and Depreciation Overview
More
Adjustments to Basis Examples Chart
Depreciable Property Chart
Repairs vs. Improvements Chart
Leased Property—Incidents of Ownership Chart
Form 4562, Depreciation and Amortization Chart
Expiring Tax Provisions Chart
What's New Chart
Depreciation Overview
Basics of Depreciation
Placed in Service Date
Depreciation Allowed or Allowable
Property Requirements
Property Owned By the Taxpayer
Property Used in Business or Income-Producing Activity
Property Having a Determinable Useful Life
Property Lasting More Than One Year
Non-Depreciable Assets
Intangible Property
Cost Basis
Real Property
Adjusted Basis
Other Basis
Repairs and Improvements
Repairs and Improvements Flow Chart
Tangible Property Regulations
Improvements—Capitalization Required
Materials and Supplies
De Minimis Safe Harbor Election
Routine Maintenance Safe Harbor
Capitalize Repair and Maintenance Costs Election
Small Taxpayer Safe Harbor Election
Remodel-Refresh Safe Harbor
Leased Property
Rental of Property Used in Business
Lease or Purchase
Capitalizing Rent Expenses
Improvements by Lessee
Taxes on Leased Business Property
Cost of Getting a Lease
Tab 2
Section 179 and Special Depreciation
More
Common Property for Section 179 Deduction Chart
Section 179 Maximum Deduction and Investment Limit Chart
Special Depreciation Allowance Percentages Chart
Section 179 vs. Special Depreciation Chart
Section 179 Deduction
Section 179
Section 179 Limitations
Business Income Limit
Partnerships and S Corporations
Other Corporations
Situations That Affect Limits
Section 179 Property
Qualifying Property
Nonqualifying Property
Section 179 Carryover
Section 179 Election/Revocation
Section 179 Recapture
Special Depreciation Allowance
Special Depreciation (Bonus Depreciation)
Qualifying Property
Nonqualifying Property
Claiming Special Depreciation
Depreciable Basis
Special Depreciation Comparison Chart
Special Depreciation Recapture
Ordering Rules
Section 179 Deduction vs. Special Depreciation Allowance
Tab 3
Depreciation Fundamentals
More
AMT Depreciation Adjustments Chart
Half-Year Convention Depreciation Rates Chart
MACRS Recovery Periods for Commonly-Used Assets Chart
Recovering the Cost of Computer Software Chart
MACRS Recovery Periods Chart
MACRS Depreciation
Form 4562, Depreciation and Amortization
Regular MACRS (GDS)
Alternative Depreciation System (ADS)
Property Classes Under GDS
Computer Software
Placed-in-Service Date
Recovery Periods
Conventions
MACRS Depreciation Methods
Comparison of MACRS Depreciation Methods
Computing Depreciation
MACRS Percentage Tables
MACRS Worksheet
Computing the Deduction Without Using the Tables
Using the Applicable Convention
Examples
Farming Assets Depreciation
Property Used in Farming Business
Uniform Capitalization Rules for Farmers
Short Tax Year Depreciation
Short Tax Year
Short Tax Year Conventions
Computing Depreciation in a Short Tax Year
Short-Year Depreciation Formulas (First Year)
General Asset Account (GAA)
Depreciation Adjustments for Alternative Minimum Tax
AMT Depreciation Adjustments
Miscellaneous Depreciation Issues
Income Forecast Method [IRC §167(g)]
Unit of Production Method
Unit of Production Formula
Abandonment
Idle Property
Change of Use—MACRS Property
Indian Reservation Property
ACRS
Depreciation Recapture on Real Property Depreciated Under ACRS
Tab 4
MACRS Depreciation Tables
More
MACRS Recovery Periods for Commonly-Used Assets
MACRS Depreciation Tables Index
Half-Year Convention Depreciation Rates
Table A. 3-Year MACRS Property
Table B. 5-Year MACRS Property
Table C. 7-Year MACRS Property
Table D. 10-Year MACRS Property
Table E. 15-Year MACRS Property
Table F. 20-Year MACRS Property
Table G. Residential Rental Property Mid-Month Convention Straight Line—27.5 Years (GDS)
Table H. Nonresidential Real Property Mid-Month Convention Straight Line—31.5 Years (GDS)
Table I. Nonresidential Real Property Mid-Month Convention Straight Line—39 Years (GDS)
Table J. Straight Line Method Half-Year Convention
Table K. Straight Line Method Mid-Quarter Convention Placed in Service in First Quarter
Table L. Straight Line Method Mid-Quarter Convention Placed in Service in Second Quarter
Table M. Straight Line Method Mid-Quarter Convention Placed in Service in Third Quarter
Table N. Straight Line Method Mid-Quarter Convention Placed in Service in Fourth Quarter
Table O. Residential Rental Property Placed in Service After 2017 Straight Line Mid-Month Convention—30 Years (ADS)
Table P. Straight Line Mid-Month Convention—40 Years
Table Q. 150% Declining Balance Method Half-Year Convention
Table R. 150% Declining Balance Method Mid-Quarter Convention Property Placed in Service in First Quarter
Table S. 150% Declining Balance Method Mid-Quarter Convention Property Placed in Service in Second Quarter
Table T. 150% Declining Balance Method Mid-Quarter Convention Property Placed in Service in Third Quarter
Table U. 150% Declining Balance Method Mid-Quarter Convention Property Placed in Service in Fourth Quarter
Qualified Indian Reservation Property Tables for Property Placed in Service Before 2022
Table V. 2-Year Qualified Indian Reservation Property Half-Year and Mid-Quarter Conventions
Table W. 4-Year Qualified Indian Reservation Property Half-Year and Mid-Quarter Conventions
Table X. 6-Year Qualified Indian Reservation Property Half-Year and Mid-Quarter Conventions
Table Y. Qualified Nonresidential Real Indian Reservation Property Mid-Month Convention Straight Line—22 Years
Revenue Procedure 87-56, Recovery Classes, Class Lives, and Recovery Periods
Sec. 1. Purpose
Sec. 2. General Rules of Application
Sec. 3. Assigned Property With Assigned Class Lives, Recovery Classes, or Recovery Periods
Sec. 4. Prescription and Modification of Class Lives
Sec. 5. Tables of Class Lives and Recovery Periods
Sec. 6. Effect on Other Revenue Procedures
Tables of Class Lives and Recovery Periods
How To Use the Tables
Table 1. Table of Class Lives and Recovery Periods
Table 2. Table of Class Lives and Recovery Periods
Tab 5
Automobiles and Listed Property
More
Vehicle Depreciation Limitations (Section 280F) Chart
Section 179 Limits Chart
Standard Mileage Rate Per Mile Chart
When Are Transportation Expenses Deductible?
Auto Expenses Summary
Listed Property
Rules for Listed Property
Depreciation for Listed Property
Qualified Business Use
Lessee's Inclusion Amount—Other Than Passenger Automobiles
Recordkeeping for Listed Property
Reporting Listed Property
Business Autos
Business Use of Auto
Transportation vs. Travel
Commuting
Office in Home—Commuting Exception
Standard Mileage Rate vs. Actual Expenses
Standard Mileage Rate Method
Actual Expense Method
Luxury Auto Limits (Section 280F)
Section 280F Depreciation Limits
Qualified Nonpersonal-Use Vehicles
MACRS Depreciation on Business Autos
MACRS Depreciation on Business Autos
Depreciation After End of Recovery Period
Converting Personal-Use Auto to Business Use
Converting Business -Use Auto to Personal Use
Depreciation Recapture
Sale of Business Auto
Business Auto Trade-In Rules
Leased Autos
Vehicle Credits
Depreciation
Alternative Motor Vehicle Credit (Form 8910)
Alternative Fuel Vehicle Refueling Property Credit (Form 8911)
Qualified Plug-In Electric Drive Motor Vehicle Credit (Form 8936)
Lease Inclusion Tables
Rates to Compute Inclusion Amounts for Leased Listed Property
Business Mileage and Expense Log
Tab 6
MACRS Recovery Periods for Property Used in Rental Activities Chart
Farming Property and Buildings Recovery Periods Chart
Real Property Chart
Qualified Real Property Chart
Business Use of Home Methods Chart
Real Property
Property Requirements
Basis of Real Property
MACRS
Section 179 Deduction
Special Depreciation Allowance
Land
Roads
Parking
Signs and Billboards
Retail Motor Fuels Outlet
Rental Real Estate
Residential Rental Property
Depreciation Methods for Residential Rental Property
Conversion of Personal Property to Rental Use
Cooperatives
Nonresidential Real Property
Sale of Rental Property
Business Use of Home
Regular Method
Simplified Method
Employee Business Use of Home
Reporting Expenses for Business Use of the Home
Farm Buildings and Real Property
Land
Farm Buildings
Section 179 Eligible Property
Special Depreciation Eligible Property
Listed Property
Like-Kind Exchanges
Depletion
Qualified Improvement Property
Cost Segregation
Buildings and Structural Components
Cost Segregation Studies
Cost Segregation Court Cases—Real vs. Personal Property
Asset Classification—Hotel/Casino Industry
Asset Classification—Restaurant Industry
Asset Classification—Retail Industries
Asset Classification—Pharmaceutical and Biotechnology
Asset Classification—Auto Dealership Industry
Asset Classification—Auto Manufacturing Industry
Asset Classification—Electrical Distribution System
Asset Classification—Stand-Alone Open-Air Parking Structure
Tab 7
Amortization and Intangible Assets
More
Recovering the Cost of Computer Software Chart
Organizational Costs Chart
Intangibles Code Section Chart
Start-Up and Organizational Cost Deduction Limits Chart
Amortization
Amortizing Intangibles
Form 4562, Depreciation and Amortization
Section 197 Intangibles
Amortizing Section 197 Intangibles
Section 197 Intangibles Defined
Assets That Are Not Section 197 Intangibles
Safe Harbor for Creative Property Costs
Anti-Churning Rules
Incorrect Amount of Amortization Deducted
Disposition of Section 197 Intangibles
Business Start-Up Costs and Organizational Costs
Business Start-Up Costs
Costs of Organizing a Corporation
Costs of Organizing a Partnership
Amortization and Deduction
How to Make the Amortization Election
Getting a Lease
Points
Home Mortgage Points
Business and Investment Property
Research and Experimental Costs
Reforestation Costs
Geological and Geophysical Costs
Income Forecast Method
Pollution Control Facilities
Optional Write-Off of Certain Tax Preferences
Tab 8
Disposition, Sales, and Depreciation Recapture
More
Types of Property Chart
Reporting Sales of Business Property (Form 4797) Chart
Gain on Sale of Business Property Chart
Dispositions and Sales
Disposing of Business Property
Capital Gain Tax Rates
Section 1231 Transactions
Section 1231 Gains and Losses
Depreciation Recapture
General Asset Accounts
Section 1245 Property
Section 1245 Gain Treated as Ordinary Income
Section 1250 Property
Sale of MACRS Real Property
Additional Depreciation
Applicable Percentage
Section 1250 Gain Treated as Ordinary Income
Unrecaptured Section 1250 Gain
Reporting on Form 4797, Sales of Business Property
Dispositions of Improved Property
Net Investment Income Tax
Depreciation Recapture—Other Situations
Depreciation Recapture—Section 179
Depreciation Recapture—Special Depreciation Allowance
Excess Depreciation—Listed Property
Gifts
Transfers at Death
Multiple Property Dispositions
Other Dispositions
Sale of a Business
Dispositions of Intangible Property
Subdivision of Land
Timber
Precious Metals and Stones, Stamps, and Coins
Coal and Iron Ore
Conversion Transactions
Qualified Opportunity Fund
Virtual Currency
Farm Dispositions
Sales of Farm Products
Dispositions of Farm Assets
Farm Depreciation Recapture
Sale of a Farm
Installment Sales
Installment Sale Income (Form 6252)
Calculating Installment Sale Income
Reporting Installment Sale Income
Interest on Deferred Tax
Installment Sale to a Related Party
Buyer Assumes Mortgage
Selling Price Reduced in Subsequent Year
Unrecaptured Section 1250 Gain—Installment Sale
Pledge Rule (Installment Obligations Used as Security)
Electing Out of an Installment Sale
Installment Sale Depreciation Recapture
Foreclosure or Repossession
Foreclosure or Repossession—Buyer
Seller's (Lender's) Gain or Loss on Repossession
Installment Sale Repossessions
Tab 9
Like-Kind Exchanges and Involuntary Conversions
More
Basis of Replacement Property Chart
Depreciation After Exchange or Conversion Chart
Property Requirements Like-Kind Exchange Chart
Like-Kind Property Chart
Like-Kind Exchange—Gain Realized Chart
Like-Kind Exchange—Gain Recognized Chart
Involuntary Conversions Chart
Like-Kind Exchanges
Property Requirements Like-Kind Exchange
Gain Recognized
Basis of Like-Kind Property Received
Related Parties
Reporting Like-Kind Exchanges, Form 8824
Deferred Exchanges
Safe Harbors Against Actual and Constructive Receipt in Deferred Exchanges
Parking Transactions
Partially Nontaxable Exchanges
Multiple Property Exchanges
Partial Dispositions of MACRS Property
Involuntary Conversions
Condemnations
Gain or Loss From Condemnations
Postponement of Gain
Replacement Property
Replacement Period
Determining When Gain is Realized
Election to Postpone Gain
Reporting a Condemnation Gain or Loss
Depreciation for Like-Kind Exchanges and Involuntary Conversions
Depreciating Replacement Property
Default Rules Summary
Determination of Depreciation Allowance
Election Out of Depreciation Default Rules
Property Acquired in a Nontaxable Transfer
Form 8824 Illustrated Example
Tab 10
Depletion Methods Chart
Economic Interest Chart
Percentage Depletion Use Chart
Deposits Percentage Depletion Rates [IRC §613(b)] Chart
Oil or Gas Percentage Depletion Rates Chart
Depletion
Depletion Deduction
Economic Interest in Mineral Property or Timber
Alternative Minimum Tax (AMT) Adjustment
Depletion Methods
Cost Depletion
Percentage Depletion
Mineral Property
Oil and Gas Wells
Economic Interest in Oil or Gas Property
Percentage Depletion—Oil and Gas Wells
Calculating Percentage Depletion
Partnerships and S Corporations
Enhanced Oil Recovery Credit (Form 8830)
Natural Gas Wells
Mines and Geothermal Deposits
Mines and Other Natural Deposits
Geothermal Deposits
Timber
Timber Depletion
Elections
Form T (Timber), Forest Activities Schedule
Tab 11
Depreciation Changes and Errors
More
Changing Depreciation Accounting Methods Chart
Correcting Depreciation Errors Chart
IRC Section 481(a) Adjustment Recognition Period Chart
Common Depreciation Automatic Accounting Method Changes for Form 3115 Chart
How to Correct Depreciation Errors
Filing an Amended Return
Requesting a Change in Accounting Method
Change in Accounting Method
IRC Section 481(a) Adjustment
Taxpayers Under Examination
Depreciation Errors on Disposed of Assets
Gain or Loss on Asset Disposition
Making the Change
Example for Filled-In Form 3115
