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IRS.gov Website
Publication 946
taxmap/pubs/p946-019.htm#en_us_publink1000107507

Chapter 4
Figuring Depreciation Under MACRS(p31)

For Use in Tax Year 2013

taxmap/pubs/p946-019.htm#en_us_publink1000270859Introduction

The Modified Accelerated Cost Recovery System (MACRS) is used to recover the basis of most business and investment property placed in service after 1986. MACRS consists of two depreciation systems, the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). Generally, these systems provide different methods and recovery periods to use in figuring depreciation deductions.
EIC
To be sure you can use MACRS to figure depreciation for your property, see What Method Can You Use To Depreciate Your Property in chapter 1.
This chapter explains how to determine which MACRS depreciation system applies to your property. It also discusses other information you need to know before you can figure depreciation under MACRS. This information includes the property's recovery class, placed in service date, and basis, as well as the applicable recovery period, convention, and depreciation method. It explains how to use this information to figure your depreciation deduction and how to use a general asset account to depreciate a group of properties. Finally, it explains when and how to recapture MACRS depreciation.

taxmap/pubs/p946-019.htm#TXMP2e5d65e1

Useful items

You may want to see:


Publication
 225  Farmer's Tax Guide
 463  Travel, Entertainment, Gift, and Car
Expenses

 544  Sales and Other Dispositions of Assets
 551  Basis of Assets
 587  Business Use of Your Home (Including Use by Daycare Providers)
Form (and Instructions)
 2106 : Employee Business Expenses
 2106-EZ : Unreimbursed Employee Business Expenses
 4562 : Depreciation and Amortization
See chapter 6 for information about getting publications and forms.
taxmap/pubs/p946-019.htm#en_us_publink1000107509

Which Depreciation System (GDS or ADS) Applies?(p31)

For Use in Tax Year 2013
rule

Words you may need to know (see Glossary)

Your use of either the General Depreciation System (GDS) or the Alternative Depreciation System (ADS) to depreciate property under MACRS determines what depreciation method and recovery period you use. You generally must use GDS unless you are specifically required by law to use ADS or you elect to use ADS.
If you placed your property in service in 2013, complete Part III of Form 4562 to report depreciation using MACRS. Complete section B of Part III to report depreciation using GDS, and complete section C of Part III to report depreciation using ADS. If you placed your property in service before 2013 and are required to file Form 4562, report depreciation using either GDS or ADS on line 17 in Part III.
taxmap/pubs/p946-019.htm#en_us_publink1000107510

Required use of ADS.(p32)

For Use in Tax Year 2013
rule
You must use ADS for the following property.
EIC
If you are required to use ADS to depreciate your property, you cannot claim any special depreciation allowance (discussed in chapter 3) for the property.
taxmap/pubs/p946-019.htm#en_us_publink1000107512

Electing ADS.(p32)

For Use in Tax Year 2013
rule
Although your property may qualify for GDS, you can elect to use ADS. The election generally must cover all property in the same property class that you placed in service during the year. However, the election for residential rental property and nonresidential real property can be made on a property-by-property basis. Once you make this election, you can never revoke it.
You make the election by completing line 20 in Part III of Form 4562.