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Chapter 4. Figuring Depreciation Under MACRS. Which Depreciation System \(GDS or ADS\) Applies? Which Property Class Applies Under GDS? What Is the Placed in Service Date? What Is the Basis for Depreciation? Which Recovery Period Applies? Which Convention Applies? Which Depreciation Method Applies? How Is the Depreciation Deduction Figured?
The term “Modified Accelerated Cost Recovery System” (MACRS) includes the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). Generally, MACRS is used to depreciate any tangible property placed in service after 1986.
This publication explains how you can recover the cost of business or income-producing property through deductions for depreciation (for example, the special depreciation allowance and deductions under the Modified Accelerated Cost Recovery System (MACRS)).
The term “Modified Accelerated Cost Recovery System” (MACRS) includes the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). Generally, MACRS is used to depreciate any tangible property placed in service after 1986.
tions for depreciation (for example, the special deprecia-tion allowance and deductions under the Modified Accel-erated Cost Recovery System (MACRS)). It also explains how you can elect to take a section 179 deduction, in-stead of depreciation deductions, for certain property, and the additional rules for listed property.
Publication 946 explains how you can recover the cost of business or income-producing property through deductions for depreciation.
You can use the percentages in Table 2-2 to compute annual depreciation under MACRS. The tables show the percentages for the first few years or until the change to the straight line method is made.
If your property qualified for MACRS, you must depreciate it under MACRS. See Pub. 946. However, you cannot use MACRS for certain property because of special rules that exclude it from MACRS.
MACRS provides a uniform method for all taxpayers to compute the depreciation. Using the basis, class life, and the MACRS tables, you can compute the deduction for each asset in the year it is placed in service and each subsequent year of its class life.
to figure both the section 179 and depreciation de-ductions. It includes a filled-in Form 4562 and depreci-ation worksheet. Chapter 6 tells you how to get information, free publications, and forms from the IRS. Appendix A contains the MACRS Percentage Tables. Appendix B contains The Table of Class Lives and Recovery Periods. Definitions.