MACRS

The Modified Accelerated Cost Recovery System (MACRS) is the current tax depreciation system in the United States. Under this system, the capitalized cost (basis) of tangible property is recovered over a specified life by annual deductions for depreciation. The lives are specified broadly in the Internal Revenue Code. The Internal Revenue Service (IRS) publishes detailed tables of lives by classes of assets. The deduction for depreciation is computed under one of two methods (declining balance switching to straight line or straight line) at the election of the taxpayer, with limitations.[1] See IRS Publication 946 for a 120-page guide to MACRS.

  1. ^ Note that under 26 USC 179, taxpayers may elect to claim a deduction for the full basis of certain amounts of property placed in service during the taxable year, subject to limitations. This election supersedes MACRS deductions for the basis so deducted.