MACRS and MACRS SL class life methods of depreciation

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MACRS method

When you choose the MACRS method, the MACRS depreciation deduction is determined by applying the depreciation method* to the depreciable basis over the applicable recovery period, which is subject to the placed-in-service conventions.

* The application's method of MACRS incorporates three different depreciation methods: 200% DB (switching to straight line when appropriate), 150% DB (switching to straight line when appropriate), and straight line. When the MACRS method is chosen, the application calculates current depreciation based on one of those methods depending on the asset's life and when it was placed in service.

MACRS SL class life method

Use the MACRS SL Class Life method for a MACRS asset for which you are making the irrevocable election under Code Section 168(b)(5) to depreciate the asset straight line over the class life (as opposed to MACRS straight line over the recovery period). The asset will depreciate SL over 40 years for 27.5-, 31.5-, and 39-year recovery period property, and over 50 years for 25-year recovery period property.

Example for MACRS real property acquired after May 12, 1993

  • If you enter MACRS in the Method field and you enter 39 in the Life field, the asset will depreciate using straight line over 39 years.
  • If you enter MACRS SL Class Life in the Method field and you enter 39 in the Life field, the asset will depreciate using straight line over 40 years. (Forty years is the class life for 39-year recovery property.)

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