What is Modified Accelerated Cost Recovery System (MACRS)?
In short
The Modified Accelerated Cost Recovery System (MACRS) is the federal tax depreciation system. It assigns property to recovery classes with set lives, methods and conventions, and ignores salvage value.
Key takeaways
- Personal property uses the half-year convention, or mid-quarter if more than 40% is placed in service in the last quarter.
- Residential rental property is depreciated over 27.5 years and nonresidential real property over 39 years, straight-line, with the mid-month convention.
- Land is never depreciated.
Where it's tested
REG: Property Transactions: Basis & Cost Recovery — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under MACRS, when must the mid-quarter convention be used for personal property?