Department of the Treasury

Internal Revenue Service

Publication 946

Cat. No. 13081F

How To

Depreciate

Property

• Section 179 Deduction

• Special Depreciation

Allowance

• MACRS

• Listed Property

For use in preparing

2023 Returns

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Contents

Future Developments ....................... 2

What's New for 2023 ........................ 2

What’s New for 2024 ........................ 2

Reminders ............................... 2

Introduction .............................. 2

Chapter 1. Overview of Depreciation .......... 3

What Property Can Be Depreciated? .......... 3

What Property Cannot Be Depreciated? ........ 6

When Does Depreciation Begin and End? ...... 7

What Method Can You Use To Depreciate 

Your Property? ........................ 7

What Is the Basis of Your Depreciable 

Property? ........................... 11

How Do You Treat Repairs and 

Improvements? ...................... 12

Do You Have To File Form 4562? ............ 13

How Do You Correct Depreciation 

Deductions? ......................... 13

Chapter 2. Electing the Section 

179 Deduction ........................ 15

What Property Qualifies? .................. 15

What Property Does Not Qualify? ........... 17

How Much Can You Deduct? ............... 17

How Do You Elect the Deduction? ........... 21

When Must You Recapture the Deduction? ..... 22

Chapter 3. Claiming the Special 

Depreciation Allowance ................. 23

What Is Qualified Property? ................ 23

How Much Can You Deduct? ............... 25

How Can You Elect Not To Claim an 

Allowance? ......................... 26

When Must You Recapture an Allowance? ..... 26

Chapter 4. Figuring Depreciation 

Under MACRS ........................ 26

Which Depreciation System (GDS or ADS) 

Applies? ........................... 27

Which Property Class Applies Under GDS? .... 28

What Is the Placed in Service Date? .......... 30

What Is the Basis for Depreciation? .......... 31

Which Recovery Period Applies? ............ 31

Which Convention Applies? ................ 32

Which Depreciation Method Applies? ......... 33

How Is the Depreciation Deduction Figured? .... 34

How Do You Use General Asset Accounts? .... 46

When Do You Recapture MACRS 

Depreciation? ........................ 50

Chapter 5. Additional Rules for 

Listed Property ........................ 50

What Is Listed Property? .................. 51

Can Employees Claim a Deduction? ......... 52

Feb 14, 2024
What Is the Business-Use Requirement? ...... 53

Do the Passenger Automobile Limits Apply? .... 57

What Records Must Be Kept? .............. 61

How Is Listed Property Information 

Reported? .......................... 63

How To Get Tax Help ....................... 63

Appendix A .............................. 68

Appendix B .............................. 96

Glossary ............................... 107

Index ................................. 109

Future Developments

For the latest information about developments related to 

Pub. 946, such as legislation enacted after this publication 

was published, go to IRS.gov/Pub946.

What's New for 2023

Section 179 deduction dollar limits. For tax years beginning in 2023, the maximum section 179 expense deduction is $1,160,000. This limit is reduced by the amount 

by which the cost of section 179 property placed in service during the tax year exceeds $2,890,000.

Also, the maximum section 179 expense deduction for 

sport utility vehicles placed in service in tax years beginning in 2023 is $28,900.

Phase down of special depreciation allowance. The 

special depreciation allowance is 80% for certain qualified 

property acquired after September 27, 2017, and placed 

in service after December 31, 2022, and before January 1, 

2024 (other than certain property with a long production 

period and certain aircraft). The special depreciation allowance is also 80% for certain specified plants bearing 

fruits and nuts planted or grafted after December 31, 

2022, and before January 1, 2024. See Certain Qualified 

Property Acquired After September 27, 2017 and Certain 

Plants Bearing Fruits and Nuts under What Is Qualified 

Property? in chapter 3.

Depreciation limits on business vehicles. The total 

section 179 deduction and depreciation you can deduct 

for a passenger automobile, including a truck or van, you 

use in your business and first placed in service in 2023 is 

$20,200, if the special depreciation allowance applies, or 

$12,200, if the special depreciation allowance does not 

apply. See Maximum Depreciation Deduction in chapter 5.

What’s New for 2024

Section 179 deduction dollar limits. For tax years beginning in 2024, the maximum section 179 expense deduction is $1,220,000. This limit is reduced by the amount 

by which the cost of section 179 property placed in service during the tax year exceeds $3,050,000.

Also, the maximum section 179 expense deduction for 

sport utility vehicles placed in service in tax years beginning in 2024 is $30,500.

Phase down of special depreciation allowance. The 

special depreciation allowance is 60% for certain qualified 

property acquired after September 27, 2017, and placed 

in service after December 31, 2023, and before January 1, 

2025 (other than certain property with a long production 

period and certain aircraft). Property with a long production period and certain aircraft placed in service after December 31, 2023, and before January 1, 2025, is eligible 

for a special depreciation allowance of 80% of the depreciable basis of the property. The special depreciation allowance is also 60% for certain specified plants bearing 

fruits and nuts planted or grafted after December 31, 

2023, and before January 1, 2025. See Certain Qualified 

Property Acquired After September 27, 2017 and Certain 

Plants Bearing Fruits and Nuts under What Is Qualified 

Property? in chapter 3.

Reminders

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for 

Missing & Exploited Children® (NCMEC). Photographs of 

missing children selected by the Center may appear in 

this publication on pages that would otherwise be blank. 

You can help bring these children home by looking at the 

photographs and calling 1-800-THE-LOST 

(1-800-843-5678) if you recognize a child.

Introduction

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)). It also explains 

how you can elect to take a section 179 deduction, instead of depreciation deductions, for certain property and 

the additional rules for listed property.

The depreciation methods discussed in this publication generally do not apply to property placed in 

service before 1987. For more information, see 

Pub. 534, Depreciating Property Placed in Service Before 

1987.

Definitions. Many of the terms used in this publication 

are defined in the Glossary at the end of this publication. 

Glossary terms used in each discussion under the major 

headings are listed before the beginning of each discussion throughout the publication.

Do you need a different publication? The following table shows where you can get more detailed information 

when depreciating certain types of property.

CAUTION

!

2 Publication 946 (2023)
For information

on depreciating:

See Publication:

A car 463, Travel, Gift, and Car Expenses 

Residential rental 

property 527, Residential Rental Property

Office space in 

your home 587, Business Use of Your Home 

Farm property 225, Farmer's Tax Guide

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1.

Overview of Depreciation

Introduction

Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property. It is an allowance 

for the wear and tear, deterioration, or obsolescence of 

the property.

This chapter discusses the general rules for depreciating property and answers the following questions.

• What property can be depreciated?

• What property cannot be depreciated?

• When does depreciation begin and end?

• What method can you use to depreciate your property?

• What is the basis of your depreciable property?

• How do you treat repairs and improvements?

• Do you have to file Form 4562?

• How do you correct depreciation deductions?

Useful Items

You may want to see:

Publication

Depreciating Property Placed in Service Before 

1987

Accounting Periods and Methods

Basis of Assets

Form (and Instructions)

c(o) Profit or Loss From Business

Employee Business Expenses

Application for Change in Accounting Method

Depreciation and Amortization

See How To Get Tax Help for information about getting 

publications and forms.

What Property Can Be 

Depreciated?

Terms you may need to know 

(see Glossary):

Adjusted basis

Basis

Commuting

Disposition

Fair market value (FMV)

Intangible property

Listed property

Placed in service

Tangible property

Term interest

Useful life

 534 

 538 

 551 

 Sch C (Form 1040)

 2106 

 3115 

 4562 

Publication 946 (2023) Chapter 1 Overview of Depreciation 3
You can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment. You can also depreciate certain intangible property, such as patents, copyrights, and 

computer software.

To be depreciable, the property must meet all the following requirements.

• It must be property you own.

• It must be used in your business or income-producing 

activity.

• It must have a determinable useful life.

• It must be expected to last more than 1 year.

The following discussions provide information about these 

requirements.

Property You Own

To claim depreciation, you must usually be the owner of 

the property. You are considered as owning property even 

if it is subject to a debt.

Example 1. You made a down payment to purchase 

rental property and assumed the previous owner's mortgage. You own the property and you can depreciate it.

Example 2. You bought a new van that you will use 

only for your courier business. You will be making payments on the van over the next 5 years. You own the van 

and you can depreciate it.

Leased property. You can depreciate leased property 

only if you retain the incidents of ownership in the property 

(explained below). This means you bear the burden of exhaustion of the capital investment in the property. Therefore, if you lease property from someone to use in your 

trade or business or for the production of income, generally you cannot depreciate its cost because you do not retain the incidents of ownership. You can, however, depreciate any capital improvements you make to the property. 

See How Do You Treat Repairs and Improvements, later in 

this chapter, and Additions and Improvements under 

Which Recovery Period Applies? in chapter 4.

If you lease property to someone, you can generally depreciate its cost even if the lessee (the person leasing 

from you) has agreed to preserve, replace, renew, and 

maintain the property. However, if the lease provides that 

the lessee is to maintain the property and return to you the 

same property or its equivalent in value at the expiration of 

the lease in as good condition and value as when leased, 

you cannot depreciate the cost of the property.

Incidents of ownership. Incidents of ownership in 

property include the following.

• The legal title to the property.

• The legal obligation to pay for the property.

• The responsibility to pay maintenance and operating 

expenses.

• The duty to pay any taxes on the property.

• The risk of loss if the property is destroyed, condemned, or diminished in value through obsolescence 

or exhaustion.

Life tenant. Generally, if you hold business or investment 

property as a life tenant, you can depreciate it as if you 

were the absolute owner of the property. However, see 

Certain term interests in property under Excepted Property, later.

Cooperative apartments. If you are a tenant-stockholder in a cooperative housing corporation and use your 

cooperative apartment in your business or for the production of income, you can depreciate your stock in the corporation, even though the corporation owns the apartment.

Figure your depreciation deduction as follows.

1. Figure the depreciation for all the depreciable real 

property owned by the corporation in which you have 

a proprietary lease or right of tenancy. If you bought 

your cooperative stock after its first offering, figure the 

depreciable basis of this property as follows.

a. Multiply your cost per share by the total number of 

outstanding shares, including any shares held by 

the corporation.

b. Add to the amount figured in (a) any mortgage 

debt on the property on the date you bought the 

stock.

c. Subtract from the amount figured in (b) any mortgage debt that is not for the depreciable real property, such as the part for the land.

2. Subtract from the amount figured in (1) any depreciation for space owned by the corporation that can be 

rented but cannot be lived in by tenant-stockholders.

3. Divide the number of your shares of stock by the total 

number of outstanding shares, including any shares 

held by the corporation.

4. Multiply the result of (2) by the percentage you figured 

in (3). This is your depreciation on the stock.

Your depreciation deduction for the year cannot be 

more than the part of your adjusted basis in the stock of 

the corporation that is allocable to your business or income-producing property. You must also reduce your depreciation deduction if only a portion of the property is 

used in a business or for the production of income.

Example. You figure your share of the cooperative 

housing corporation's depreciation to be $30,000. Your 

adjusted basis in the stock of the corporation is $50,000. 

You use one-half of your apartment solely for business 

purposes. Your depreciation deduction for the stock for the 

year cannot be more than $25,000 (1/2 of $50,000).

4 Chapter 1 Overview of Depreciation Publication 946 (2023)
Change to business use. If you change your cooperative apartment to business use, figure your allowable depreciation as explained earlier. The basis of all the depreciable real property owned by the cooperative housing 

corporation is the smaller of the following amounts.

• The FMV of the property on the date you change your 

apartment to business use. This is considered to be 

the same as the corporation's adjusted basis minus 

straight line depreciation, unless this value is unrealistic.

• The corporation's adjusted basis in the property on 

that date. Do not subtract depreciation when figuring 

the corporation's adjusted basis.

If you bought the stock after its first offering, the corporation's adjusted basis in the property is the amount figured in (1) above. The FMV of the property is considered 

to be the same as the corporation's adjusted basis figured 

in this way minus straight line depreciation, unless the 

value is unrealistic.

For a discussion of FMV and adjusted basis, see Pub. 

551.

Property Used in Your Business or 

Income-Producing Activity

To claim depreciation on property, you must use it in your 

business or income-producing activity. If you use property 

to produce income (investment use), the income must be 

taxable. You cannot depreciate property that you use 

solely for personal activities.

Partial business or investment use. If you use property 

for business or investment purposes and for personal purposes, you can deduct depreciation based only on the 

business or investment use. For example, you cannot deduct depreciation on a car used only for commuting, personal shopping trips, family vacations, driving children to 

and from school, or similar activities.

You must keep records showing the business, investment, and personal use of your property. For 

more information on the records you must keep 

for listed property, such as a car, see What Records Must 

Be Kept? in chapter 5.

Although you can combine business and investment use of property when figuring depreciation 

deductions, do not treat investment use as qualified business use when determining whether the business-use requirement for listed property is met. For information about qualified business use of listed property, see 

What Is the Business-Use Requirement? in chapter 5.

Office in the home. If you use part of your home as an 

office, you may be able to deduct depreciation on that part 

based on its business use. For information about depreciating your home office, see Pub. 587.

Inventory. You cannot depreciate inventory because it is 

not held for use in your business. Inventory is any property 

RECORDS CAUTION

!

you hold primarily for sale to customers in the ordinary 

course of your business.

If you are a rent-to-own dealer, you may be able to treat 

certain property held in your business as depreciable 

property rather than as inventory. See Rent-to-own dealer 

under Which Property Class Applies Under GDS? in 

chapter 4.

In some cases, it is not clear whether property is held 

for sale (inventory) or for use in your business. If it is unclear, examine carefully all the facts in the operation of the 

particular business. The following example shows how a 

careful examination of the facts in two similar situations results in different conclusions.

Example. Maple Corporation is in the business of 

leasing cars. At the end of their useful lives, when the cars 

are no longer profitable to lease, Maple sells them. Maple 

does not have a showroom, used car lot, or individuals to 

sell the cars. Instead, it sells them through wholesalers or 

by similar arrangements in which a dealer's profit is not intended or considered. Maple can depreciate the leased 

cars because the cars are not held primarily for sale to 

customers in the ordinary course of business, but are 

leased.

If Maple buys cars at wholesale prices, leases them for 

a short time, and then sells them at retail prices or in sales 

in which a dealer's profit is intended, the cars are treated 

as inventory and are not depreciable property. In this situation, the cars are held primarily for sale to customers in 

the ordinary course of business.

Containers. Generally, containers for the products you 

sell are part of inventory and you cannot depreciate them. 

However, you can depreciate containers used to ship your 

products if they have a life longer than 1 year and meet the 

following requirements.

• They qualify as property used in your business.

• Title to the containers does not pass to the buyer.

To determine if these requirements are met, consider 

the following questions.

• Does your sales contract, sales invoice, or other type 

of order acknowledgment indicate whether you have 

retained title?

• Does your invoice treat the containers as separate 

items?

• Do any of your records state your basis in the containers?

Property Having a Determinable 

Useful Life

To be depreciable, your property must have a determinable useful life. This means that it must be something that 

wears out, decays, gets used up, becomes obsolete, or 

loses its value from natural causes.

Publication 946 (2023) Chapter 1 Overview of Depreciation 5
Property Lasting More Than 1 Year

To be depreciable, property must have a useful life that extends substantially beyond the year you place it in service.

Example. You maintain a library for use in your profession. You can depreciate it. However, if you buy technical 

books, journals, or information services for use in your 

business that have a useful life of 1 year or less, you cannot depreciate them. Instead, you deduct their cost as a 

business expense.

What Property Cannot Be 

Depreciated?

Terms you may need to know 

(see Glossary):

Amortization

Basis

Goodwill

Intangible property

Remainder interest

Term interest

Certain property cannot be depreciated. This includes 

land and certain excepted property.

Land

You cannot depreciate the cost of land because land does 

not wear out, become obsolete, or get used up. The cost 

of land generally includes the cost of clearing, grading, 

planting, and landscaping.

Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping 

costs, incurred in preparing land for business use. These 

costs must be so closely associated with other depreciable property that you can determine a life for them along 

with the life of the associated property.

Example. You constructed a new building for use in 

your business and paid for grading, clearing, seeding, and 

planting bushes and trees. Some of the bushes and trees 

were planted right next to the building, while others were 

planted around the outer border of the lot. If you replace 

the building, you would have to destroy the bushes and 

trees right next to it. These bushes and trees are closely 

associated with the building, so they have a determinable 

useful life. Therefore, you can depreciate them. Add your 

other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them.

Excepted Property

Even if the requirements explained in the preceding discussions are met, you cannot depreciate the following 

property.

• Property placed in service and disposed of in the 

same year. Determining when property is placed in 

service is explained later.

• Equipment used to build capital improvements. You 

must add otherwise allowable depreciation on the 

equipment during the period of construction to the basis of your improvements. See Uniform Capitalization 

Rules in Pub. 551.

• Section 197 intangibles. You must amortize these 

costs. Intangible property, such as certain computer 

software, that is not section 197 intangible property, 

can be depreciated if it meets certain requirements. 

See Intangible Property, later.

• Certain term interests.

Certain term interests in property. You cannot depreciate a term interest in property created or acquired after 

July 27, 1989, for any period during which the remainder 

interest is held, directly or indirectly, by a person related to 

you. A term interest in property means a life interest in 

property, an interest in property for a term of years, or an 

income interest in a trust.

Related persons. For a description of related persons, see Related Persons, later. For this purpose, however, treat as related persons only the relationships listed 

in items (1) through (10) of that discussion and substitute 

“50%” for “10%” each place it appears.

Basis adjustments. If you would be allowed a depreciation deduction for a term interest in property except that 

the holder of the remainder interest is related to you, you 

must generally reduce your basis in the term interest by 

any depreciation or amortization not allowed.

If you hold the remainder interest, you must generally 

increase your basis in that interest by the depreciation not 

allowed to the term interest holder. However, do not increase your basis for depreciation not allowed for periods 

during which either of the following situations applies.

• The term interest is held by an organization exempt 

from tax.

• The term interest is held by a nonresident alien individual or foreign corporation, and the income from the 

term interest is not effectively connected with the conduct of a trade or business in the United States.

Exceptions. The above rules do not apply to the 

holder of a term interest in property acquired by gift, bequest, or inheritance. They also do not apply to the holder 

of dividend rights that were separated from any stripped 

preferred stock if the rights were purchased after April 30, 

1993, or to a person whose basis in the stock is determined by reference to the basis in the hands of the purchaser.

6 Chapter 1 Overview of Depreciation Publication 946 (2023)
When Does Depreciation

Begin and End?

Terms you may need to know 

(see Glossary):

Basis

Exchange

Placed in service

You begin to depreciate your property when you place it in 

service for use in your trade or business or for the production of income. You stop depreciating property either when 

you have fully recovered your cost or other basis or when 

you retire it from service, whichever happens first.

Placed in Service

You place property in service when it is ready and available for a specific use, whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity. Even if you are not using the property, it is in 

service when it is ready and available for its specific use.

Example 1. You bought a machine for your business. 

The machine was delivered last year. However, it was not 

installed and operational until this year. It is considered 

placed in service this year. If the machine had been ready 

and available for use when it was delivered, it would be 

considered placed in service last year even if it was not 

actually used until this year.

Example 2. On April 6, Sue Thorn bought a house to 

use as residential rental property. Sue made several repairs and had it ready for rent on July 5. At that time, Sue 

began to advertise it for rent in the local newspaper. The 

house is considered placed in service in July when it was 

ready and available for rent. Sue can begin to depreciate it 

in July.

Example 3. James Elm is a building contractor who 

specializes in constructing office buildings. James bought 

a truck last year that had to be modified to lift materials to 

second-story levels. The installation of the lifting equipment was completed and James accepted delivery of the 

modified truck on January 10 of this year. The truck was 

placed in service on January 10, the date it was ready and 

available to perform the function for which it was bought.

Conversion to business use. If you place property in 

service in a personal activity, you cannot claim depreciation. However, if you change the property's use to use in a 

business or income-producing activity, then you can begin 

to depreciate it at the time of the change. You place the 

property in service in the business or income-producing 

activity on the date of the change.

Example. You bought a home and used it as your personal home several years before you converted it to rental 

property. Although its specific use was personal and no 

depreciation was allowable, you placed the home in service when you began using it as your home. You can begin 

to claim depreciation in the year you converted it to rental 

property because its use changed to an income-producing use at that time.

Idle Property

Continue to claim a deduction for depreciation on property 

used in your business or for the production of income even 

if it is temporarily idle (not in use). For example, if you stop 

using a machine because there is a temporary lack of a 

market for a product made with that machine, continue to 

deduct depreciation on the machine.

Cost or Other Basis Fully Recovered

You stop depreciating property when you have fully recovered your cost or other basis. You fully recover your basis 

when your section 179 deduction, allowed or allowable 

depreciation deductions, and salvage value, if applicable, 

equal the cost or investment in the property. See What Is 

the Basis of Your Depreciable Property, later.

Retired From Service

You stop depreciating property when you retire it from 

service, even if you have not fully recovered its cost or 

other basis. You retire property from service when you 

permanently withdraw it from use in a trade or business or 

from use in the production of income because of any of 

the following events.

• You sell or exchange the property.

• You convert the property to personal use.

• You abandon the property.

• You transfer the property to a supplies or scrap account.

• The property is destroyed.

If you included the property in a general asset account, see How Do You Use General Asset Accounts? in chapter 4 for the rules that apply when 

you dispose of that property.

What Method Can You Use To 

Depreciate Your Property?

Terms you may need to know 

(see Glossary):

Adjusted basis

Basis

CAUTION

!

Publication 946 (2023) Chapter 1 Overview of Depreciation 7
Convention

Exchange

Fiduciary

Grantor

Intangible property

Nonresidential real property

Placed in service

Related persons

Residential rental property

Salvage value

Section 1245 property

Section 1250 property

Standard mileage rate

Straight line method

Unit-of-production method

Useful life

You must use the Modified Accelerated Cost Recovery 

System (MACRS) to depreciate most property. MACRS is 

discussed in chapter 4.

You cannot use MACRS to depreciate the following 

property.

• Property you placed in service before 1987.

• Certain property owned or used in 1986.

• Intangible property.

• Films, videotapes, and recordings.

• Certain corporate or partnership property acquired in 

a nontaxable transfer.

• Property you elected to exclude from MACRS.

The following discussions describe the property listed 

above and explain what depreciation method should be 

used.

Property You Placed in Service

Before 1987

You cannot use MACRS for property you placed in service 

before 1987 (except property you placed in service after 

July 31, 1986, if MACRS was elected). Property placed in 

service before 1987 must be depreciated under the methods discussed in Pub. 534.

For a discussion of when property is placed in service, 

see When Does Depreciation Begin and End, earlier.

Use of real property changed. You must generally use 

MACRS to depreciate real property that you acquired for 

personal use before 1987 and changed to business or income-producing use after 1986.

Improvements made after 1986. You must treat an improvement made after 1986 to property you placed in 

service before 1987 as separate depreciable property. 

Therefore, you can depreciate that improvement as separate property under MACRS if it is the type of property that 

otherwise qualifies for MACRS depreciation. For more information about improvements, see How Do You Treat Repairs and Improvements, later, and Additions and Improvements under Which Recovery Period Applies? in 

chapter 4.

Property Owned or Used in 1986

You may not be able to use MACRS for property you acquired and placed in service after 1986 if any of the situations described below apply. If you cannot use MACRS, 

the property must be depreciated under the methods discussed in Pub. 534.

For the following discussions, do not treat property as owned before you placed it in service. If 

you owned property in 1986 but did not place it in 

service until 1987, you do not treat it as owned in 1986.

Personal property. You cannot use MACRS for personal 

property (section 1245 property) in any of the following situations.

1. You or someone related to you owned or used the 

property in 1986.

2. You acquired the property from a person who owned it 

in 1986 and as part of the transaction the user of the 

property did not change.

3. You lease the property to a person (or someone related to this person) who owned or used the property in 

1986.

4. You acquired the property in a transaction in which:

a. The user of the property did not change, and

b. The property was not MACRS property in the 

hands of the person from whom you acquired it 

because of (2) or (3) above.

Real property. You generally cannot use MACRS for real 

property (section 1250 property) in any of the following situations.

• You or someone related to you owned the property in 

1986.

• You lease the property to a person who owned the 

property in 1986 (or someone related to that person).

• You acquired the property in a like-kind exchange, involuntary conversion, or repossession of property you 

or someone related to you owned in 1986. MACRS 

applies only to that part of your basis in the acquired 

property that represents cash paid or unlike property 

given up. It does not apply to the carried-over part of 

the basis.

Exceptions. The rules above do not apply to the following.

CAUTION

!

8 Chapter 1 Overview of Depreciation Publication 946 (2023)
1. Residential rental property or nonresidential real property.

2. Any property if, in the first tax year it is placed in service, the deduction under the Accelerated Cost Recovery System (ACRS) is more than the deduction under 

MACRS using the half-year convention. For information on how to figure depreciation under ACRS, see 

Pub. 534.

3. Property that was MACRS property in the hands of 

the person from whom you acquired it because of (2) 

above.

Related persons. For this purpose, the following are related persons.

1. An individual and a member of their family, including 

only a spouse, child, parent, sibling, half sibling, ancestor, and lineal descendant.

2. A corporation and an individual who directly or indirectly owns more than 10% of the value of the outstanding stock of that corporation.

3. Two corporations that are members of the same controlled group.

4. A trust fiduciary and a corporation if more than 10% of 

the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust.

5. The grantor and fiduciary, and the fiduciary and beneficiary, of any trust.

6. The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the 

same person is the grantor of both trusts.

7. A tax-exempt educational or charitable organization 

and any person (or, if that person is an individual, a 

member of that person's family) who directly or indirectly controls the organization.

8. Two S corporations, and an S corporation and a regular corporation, if the same persons own more than 

10% of the value of the outstanding stock of each corporation.

9. A corporation and a partnership if the same persons 

own both of the following.

a. More than 10% of the value of the outstanding 

stock of the corporation.

b. More than 10% of the capital or profits interest in 

the partnership.

10. The executor and beneficiary of any estate.

11. A partnership and a person who directly or indirectly 

owns more than 10% of the capital or profits interest 

in the partnership.

12. Two partnerships, if the same persons directly or indirectly own more than 10% of the capital or profits interest in each.

13. The related person and a person who is engaged in 

trades or businesses under common control. See 

sections 52(a) and 52(b) of the Internal Revenue 

Code.

When to determine relationship. You must determine whether you are related to another person at the 

time you acquire the property.

A partnership acquiring property from a terminating 

partnership must determine whether it is related to the terminating partnership immediately before the event causing the termination.

Constructive ownership of stock or partnership interest. To determine whether a person directly or indirectly owns any of the outstanding stock of a corporation 

or an interest in a partnership, apply the following rules.

1. Stock or a partnership interest directly or indirectly 

owned by or for a corporation, partnership, estate, or 

trust is considered owned proportionately by or for its 

shareholders, partners, or beneficiaries. However, for 

a partnership interest owned by or for a C corporation, 

this applies only to shareholders who directly or indirectly own 5% or more of the value of the stock of the 

corporation.

2. An individual is considered to own the stock or partnership interest directly or indirectly owned by or for 

the individual's family.

3. An individual who owns, except by applying rule (2), 

any stock in a corporation is considered to own the 

stock directly or indirectly owned by or for the individual's partner.

4. For purposes of rule (1), (2), or (3), stock or a partnership interest considered to be owned by a person under rule (1) is treated as actually owned by that person. However, stock or a partnership interest 

considered to be owned by an individual under rule 

(2) or (3) is not treated as owned by that individual for 

reapplying either rule (2) or (3) to make another person considered to be the owner of the same stock or 

partnership interest.

Intangible Property

Generally, if you can depreciate intangible property, you 

usually use the straight line method of depreciation. However, you can choose to depreciate certain intangible 

property under the income forecast method (discussed 

later).

You cannot depreciate intangible property that is a 

section 197 intangible or that does not otherwise 

meet all the requirements discussed earlier under 

What Property Can Be Depreciated.

Straight Line Method

This method lets you deduct the same amount of depreciation each year over the useful life of the property. To figure your deduction, first determine the adjusted basis, salvage value, and estimated useful life of your property. 

Subtract the salvage value, if any, from the adjusted basis. 

CAUTION

!

Publication 946 (2023) Chapter 1 Overview of Depreciation 9
The balance is the total depreciation you can take over the 

useful life of the property.

Divide the balance by the number of years in the useful 

life. This gives you your yearly depreciation deduction. Unless there is a big change in adjusted basis or useful life, 

this amount will stay the same throughout the time you depreciate the property. If, in the first year, you use the property for less than a full year, you must prorate your depreciation deduction for the number of months in use.

Example. In April, you bought a patent for $5,100 that 

is not a section 197 intangible. You depreciate the patent 

under the straight line method, using a 17-year useful life 

and no salvage value. You divide the $5,100 basis by 17 

years to get your $300 yearly depreciation deduction. You 

only used the patent for 9 months during the first year, so 

you multiply $300 by 9/12 to get your deduction of $225 for 

the first year. Next year, you can deduct $300 for the full 

year.

Patents and copyrights. If you can depreciate the cost 

of a patent or copyright, use the straight line method over 

the useful life. The useful life of a patent or copyright is the 

lesser of the life granted to it by the government or the remaining life when you acquire it. However, if the patent or 

copyright becomes valueless before the end of its useful 

life, you can deduct in that year any of its remaining cost or 

other basis.

Computer software. Computer software is generally a 

section 197 intangible and cannot be depreciated if you 

acquired it in connection with the acquisition of assets 

constituting a business or a substantial part of a business.

However, computer software is not a section 197 intangible and can be depreciated, even if acquired in connection with the acquisition of a business, if it meets all of the 

following tests.

• It is readily available for purchase by the general public.

• It is subject to a nonexclusive license.

• It has not been substantially modified.

If the software meets the tests above, it may also qualify 

for the section 179 deduction and the special depreciation 

allowance, discussed later in chapters 2 and 3. If you can 

depreciate the cost of computer software, use the straight 

line method over a useful life of 36 months.

Tax-exempt use property subject to a lease. The 

useful life of computer software leased under a lease 

agreement entered into after March 12, 2004, to a tax-exempt organization, governmental unit, or foreign person or 

entity (other than a partnership), cannot be less than 

125% of the lease term.

Certain created intangibles. You can amortize certain 

intangibles created on or after December 31, 2003, over a 

15-year period using the straight line method and no salvage value, even though they have a useful life that cannot 

be estimated with reasonable accuracy. For example, 

amounts paid to acquire memberships or privileges of indefinite duration, such as a trade association membership, are eligible costs.

The following are not eligible.

• Any intangible asset acquired from another person.

• Created financial interests.

• Any intangible asset that has a useful life that can be 

estimated with reasonable accuracy.

• Any intangible asset that has an amortization period or 

limited useful life that is specifically prescribed or prohibited by the Code, regulations, or other published 

IRS guidance.

• Any amount paid to facilitate an acquisition of a trade 

or business, a change in the capital structure of a 

business entity, and certain other transactions.

You must also increase the 15-year safe harbor amortization period to a 25-year period for certain intangibles related to benefits arising from the provision, production, or 

improvement of real property. For this purpose, real property includes property that will remain attached to the real 

property for an indefinite period of time, such as roads, 

bridges, tunnels, pavements, and pollution control facilities.

Income Forecast Method

You can choose to use the income forecast method instead of the straight line method to depreciate the following depreciable intangibles.

• Motion picture films or videotapes.

• Sound recordings.

• Copyrights.

• Books.

• Patents.

Under the income forecast method, each year's depreciation deduction is equal to the cost of the property, multiplied by a fraction. The numerator of the fraction is the current year's net income from the property, and the 

denominator is the total income anticipated from the property through the end of the 10th tax year following the tax 

year the property is placed in service. For more information, see section 167(g) of the Internal Revenue Code.

Films, videotapes, and recordings. You cannot use 

MACRS for motion picture films, videotapes, and sound 

recordings. For this purpose, sound recordings are discs, 

tapes, or other phonorecordings resulting from the fixation 

of a series of sounds. You can depreciate this property using either the straight line method or the income forecast 

method.

Participations and residuals. You can include participations and residuals in the adjusted basis of the property 

for purposes of computing your depreciation deduction 

under the income forecast method. The participations and 

residuals must relate to income to be derived from the 

property before the end of the 10th tax year after the 

10 Chapter 1 Overview of Depreciation Publication 946 (2023)
property is placed in service. For this purpose, participations and residuals are defined as costs, which by contract 

vary with the amount of income earned in connection with 

the property.

Instead of including these amounts in the adjusted basis of the property, you can deduct the costs in the tax 

year that they are paid.

Videocassettes. If you are in the business of renting 

videocassettes, you can depreciate only those videocassettes bought for rental. If the videocassette has a useful 

life of 1 year or less, you can currently deduct the cost as a 

business expense.

Corporate or Partnership Property 

Acquired in a Nontaxable Transfer

MACRS does not apply to property used before 1987 and 

transferred after 1986 to a corporation or partnership (except property the transferor placed in service after July 31, 

1986, if MACRS was elected) to the extent its basis is carried over from the property's adjusted basis in the transferor's hands. You must continue to use the same depreciation method as the transferor and figure depreciation as if 

the transfer had not occurred. However, if MACRS would 

otherwise apply, you can use it to depreciate the part of 

the property's basis that exceeds the carried-over basis.

The nontaxable transfers covered by this rule include 

the following.

• A distribution in complete liquidation of a subsidiary.

• A transfer to a corporation controlled by the transferor.

• An exchange of property solely for corporate stock or 

securities in a reorganization.

• A contribution of property to a partnership in exchange 

for a partnership interest.

• A partnership distribution of property to a partner.

Election To Exclude Property

From MACRS

If you can properly depreciate any property under a 

method not based on a term of years, such as the 

unit-of-production method, you can elect to exclude that 

property from MACRS. You make the election by reporting 

your depreciation for the property on line 15 in Part II of 

Form 4562 and attaching a statement, as described in the 

Instructions for Form 4562. You must make this election by 

the return due date (including extensions) for the tax year 

you place your property in service. However, if you timely 

filed your return for the year without making the election, 

you can still make the election by filing an amended return 

within 6 months of the due date of the return (excluding 

extensions). Attach the election to the amended return 

and write “Filed pursuant to section 301.9100-2” on the 

election statement. File the amended return at the same 

address you filed the original return.

Use of standard mileage rate. If you use the standard 

mileage rate to figure your tax deduction for your business 

automobile, you are treated as having made an election to 

exclude the automobile from MACRS. See Pub. 463 for a 

discussion of the standard mileage rate.

What Is the Basis of Your 

Depreciable Property?

Terms you may need to know 

(see Glossary):

Abstract fees

Adjusted basis

Basis

Exchange

Fair market value (FMV)

To figure your depreciation deduction, you must determine 

the basis of your property. To determine basis, you need to 

know the cost or other basis of your property.

Cost as Basis

The basis of property you buy is its cost plus amounts you 

paid for items such as sales tax (see Exception below), 

freight charges, and installation and testing fees. The cost 

includes the amount you pay in cash, debt obligations, 

other property, or services.

Exception. You can elect to deduct state and local 

general sales taxes instead of state and local income 

taxes as an itemized deduction on Schedule A (Form 

1040). If you make that choice, you cannot include those 

sales taxes as part of your cost basis.

Assumed debt. If you buy property and assume (or buy 

subject to) an existing mortgage or other debt on the property, your basis includes the amount you pay for the property plus the amount of the assumed debt.

Example. You make a $20,000 down payment on 

property and assume the seller's mortgage of $120,000. 

Your total cost is $140,000, the cash you paid plus the 

mortgage you assumed.

Settlement costs. The basis of real property also includes certain fees and charges you pay in addition to the 

purchase price. These are generally shown on your settlement statement and include the following.

• Legal and recording fees.

• Abstract fees.

• Survey charges.

• Owner's title insurance.

• Amounts the seller owes that you agree to pay, such 

as back taxes or interest, recording or mortgage fees, 

Publication 946 (2023) Chapter 1 Overview of Depreciation 11
charges for improvements or repairs, and sales commissions.

For fees and charges you cannot include in the basis of 

property, see Real Property in Pub. 551.

Property you construct or build. If you construct, build, 

or otherwise produce property for use in your business, 

you may have to use the uniform capitalization rules to determine the basis of your property. For information about 

the uniform capitalization rules, see Pub. 551 and the regulations under section 263A of the Internal Revenue 

Code.

Other Basis

Other basis usually refers to basis that is determined by 

the way you received the property. For example, your basis is other than cost if you acquired the property in exchange for other property, as payment for services you 

performed, as a gift, or as an inheritance. If you acquired 

property in this or some other way, see Pub. 551 to determine your basis.

Property changed from personal use. If you held property for personal use and later use it in your business or income-producing activity, your depreciable basis is the 

lesser of the following.

1. The FMV of the property on the date of the change in 

use.

2. Your original cost or other basis adjusted as follows.

a. Increased by the cost of any permanent improvements or additions and other costs that must be 

added to basis.

b. Decreased by any deductions you claimed for 

casualty and theft losses and other items that reduced your basis.

Example. Several years ago, Nia paid $160,000 to 

have a home built on a lot that cost $25,000. Before 

changing the property to rental use last year, Nia paid 

$20,000 for permanent improvements to the house and 

claimed a $2,000 casualty loss deduction for damage to 

the house. Land is not depreciable, so Nia includes only 

the cost of the house when figuring the basis for depreciation.

The adjusted basis in the house when Nia changed its 

use was $178,000 ($160,000 + $20,000 − $2,000). On the 

same date, the property had an FMV of $180,000, of 

which $15,000 was for the land and $165,000 was for the 

house. The basis for depreciation on the house is the FMV 

on the date of change ($165,000) because it is less than 

Nia’s adjusted basis ($178,000).

Property acquired in a nontaxable transaction. Generally, if you receive property in a nontaxable exchange, 

the basis of the property you receive is the same as the 

adjusted basis of the property you gave up. Special rules 

apply in determining the basis and figuring the MACRS 

depreciation deduction and special depreciation allowance for property acquired in a like-kind exchange or involuntary conversion. See Like-kind exchanges and involuntary conversions under How Much Can You Deduct? in 

chapter 3, and Figuring the Deduction for Property Acquired in a Nontaxable Exchange in chapter 4.

There are also special rules for determining the basis of 

MACRS property involved in a like-kind exchange or involuntary conversion when the property is contained in a 

general asset account. See How Do You Use General Asset Accounts? in chapter 4.

Adjusted Basis

To find your property's basis for depreciation, you may 

have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you 

placed it in service. These events could include the following.

• Installing utility lines.

• Paying legal fees for perfecting the title.

• Settling zoning issues.

• Receiving rebates.

• Incurring a casualty or theft loss.

For a discussion of adjustments to the basis of your property, see Adjusted Basis in Pub. 551.

If you depreciate your property under MACRS, you may 

also have to reduce your basis by certain deductions and 

credits with respect to the property. For more information, 

see What Is the Basis for Depreciation? in chapter 4.

Basis adjustment for depreciation allowed or allowable. You must reduce the basis of property by the depreciation allowed or allowable, whichever is greater. Depreciation allowed is depreciation you actually deducted 

(from which you received a tax benefit). Depreciation allowable is depreciation you are entitled to deduct.

If you do not claim depreciation you are entitled to deduct, you must still reduce the basis of the property by the 

full amount of depreciation allowable.

If you deduct more depreciation than you should, you 

must reduce your basis by any amount deducted from 

which you received a tax benefit (the depreciation allowed).

How Do You Treat Repairs and 

Improvements?

If you improve depreciable property, you must treat the improvement as separate depreciable property. Improvement means an addition to or partial replacement of property that is a betterment to the property, restores the 

property, or adapts it to a new or different use. See section 

1.263(a)-3 of the regulations.

You generally deduct the cost of repairing business 

property in the same way as any other business expense. 

However, if the cost is for a betterment to the property, to 

12 Chapter 1 Overview of Depreciation Publication 946 (2023)
restore the property, or to adapt the property to a new or 

different use, you must treat it as an improvement and depreciate it.

Example. You repair a small section on one corner of 

the roof of a rental house. You deduct the cost of the repair 

as a rental expense. However, if you completely replace 

the roof, the new roof is an improvement because it is a restoration of the building. You depreciate the cost of the 

new roof.

Improvements to rented property. You can depreciate 

permanent improvements you make to business property 

you rent from someone else.

Do You Have To File

Form 4562?

Terms you may need to know 

(see Glossary):

Amortization

Listed property

Placed in service

Standard mileage rate

Use Form 4562 to figure your deduction for depreciation 

and amortization. Attach Form 4562 to your tax return for 

the current tax year if you are claiming any of the following 

items.

• A section 179 deduction for the current year or a section 179 carryover from a prior year. See chapter 2 for 

information on the section 179 deduction.

• Depreciation for property placed in service during the 

current year.

• Depreciation on any vehicle or other listed property, 

regardless of when it was placed in service. See chapter 5 for information on listed property.

• A deduction for any vehicle if the deduction is reported 

on a form other than Schedule C (Form 1040).

• Amortization of costs if the current year is the first year 

of the amortization period.

• Depreciation or amortization on any asset on a corporate income tax return (other than Form 1120-S, U.S. 

Income Tax Return for an S Corporation) regardless of 

when it was placed in service.

You must submit a separate Form 4562 for each 

business or activity on your return for which a 

Form 4562 is required.

Table 1-1 presents an overview of the purpose of the 

various parts of Form 4562.

CAUTION

!

Employee. Do not use Form 4562 if you are an employee 

and you deduct job-related vehicle expenses using either 

actual expenses (including depreciation) or the standard 

mileage rate. Instead, use Form 2106.

How Do You Correct 

Depreciation Deductions?

If you deducted an incorrect amount of depreciation in any 

year, you may be able to make a correction by filing an 

amended return for that year. See Filing an Amended Return next. If you are not allowed to make the correction on 

an amended return, you may be able to change your accounting method to claim the correct amount of depreciation. See Changing Your Accounting Method, later.

Filing an Amended Return

You can file an amended return to correct the amount of 

depreciation claimed for any property in any of the following situations.

• You claimed the incorrect amount because of a mathematical error made in any year.

• You claimed the incorrect amount because of a posting error made in any year.

• You have not adopted a method of accounting for 

property placed in service by you in tax years ending 

after December 29, 2003.

• You claimed the incorrect amount on property placed 

in service by you in tax years ending before December 

30, 2003.

Adoption of accounting method defined. Generally, 

you adopt a method of accounting for depreciation by using a permissible method of determining depreciation 

when you file your first tax return, or by using the same impermissible method of determining depreciation in two or 

more consecutively filed tax returns.

For an exception to the 2-year rule, see sections 

6.01(1)(b), 6.19(1)(b), and 6.21(3)(b) of Revenue Procedure 2022-14 on page 502 of Internal Revenue Bulletin 

2022-7, available at IRS.gov/irb/2022–7_IRB#REVPROC-2022-14; or any successor.

When to file. If an amended return is allowed, you must 

file it by the later of the following.

• 3 years from the date you filed your original return for 

the year in which you did not deduct the correct 

amount. A return filed before an unextended due date 

is considered filed on that due date.

• 2 years from the time you paid your tax for that year.

Changing Your Accounting Method

Generally, you must get IRS approval to change your 

method of accounting. You must generally file Form 3115, 

Publication 946 (2023) Chapter 1 Overview of Depreciation 13
Application for Change in Accounting Method, to request 

a change in your method of accounting for depreciation.

The following are examples of a change in method of 

accounting for depreciation.

• A change from an impermissible method of determining depreciation for depreciable property if the impermissible method was used in two or more consecutively filed tax returns.

• A change in the treatment of an asset from nondepreciable to depreciable or vice versa.

• A change in the depreciation method, period of recovery, or convention of a depreciable asset.

• A change from not claiming to claiming the special depreciation allowance if you did not make the election 

to not claim any special allowance.

• A change from claiming a 50% special depreciation allowance to claiming a 100% special depreciation allowance for qualified property acquired and placed in 

service by you after September 27, 2017 (if you did 

not make the election under section 168(k)(10) to 

claim a 50% special depreciation allowance).

Changes in depreciation that are not a change in 

method of accounting (and may only be made on an 

amended return) include the following.

• An adjustment in the useful life of a depreciable asset 

for which depreciation is determined under section 

167.

• A change in use of an asset in the hands of the same 

taxpayer.

• Making a late depreciation election or revoking a 

timely valid depreciation election (including the election not to deduct the special depreciation allowance). 

If you elected not to claim any special depreciation allowance, a change from not claiming to claiming the 

special depreciation allowance is a revocation of the 

election and is not an accounting method change. 

Generally, you must get IRS approval to make a late 

depreciation election or revoke a depreciation election. You must submit a request for a letter ruling to 

make a late election or revoke an election.

• Any change in the placed in service date of a depreciable asset.

See sections 1.446-1(e)(2)(ii)(d) and 1.446-1(e)(2)(iii) 

of the regulations for more information and examples.

IRS approval. If your change in method of accounting for 

depreciation is described in Revenue Procedure 2019-43, 

on page 1107 of Internal Revenue Bulletin 2019-48, as 

modified, amplified, and superseded by Revenue Procedure 2022-14, on page 502 of Internal Revenue Bulletin 

2022-7, as modified, amplified, and superseded by Revenue Procedure 2023-34, on page 1207 of Internal Revenue Bulletin 2023-28, you may be able to get approval 

from the IRS to make that change under the automatic 

change request procedures generally covered in Revenue 

Procedure 2015-13 on page 419 of Internal Revenue Bulletin 2015-5. If you do not qualify to use the automatic procedures to get approval, you must use the advance consent request procedures generally covered in Revenue 

Procedure 2015-13. Also, see the Instructions for Form 

3115 for more information on getting approval, including 

lists of scope limitations and automatic accounting 

method changes.

Additional guidance. For additional guidance and 

special procedures for changing your accounting method, 

automatic change procedures, amending your return, and 

filing Form 3115, see Revenue Procedure 2015-13 on 

page 419 of Internal Revenue Bulletin 2015-5, available at 

IRS.gov/irb/2015-05_IRB#RP-2015-13; Revenue Procedure 2019-43 on page 1107 of Internal Revenue Bulletin 

2019-48, available at IRS.gov/irb/2019-48_IRB#REVPROC-2019-43; Revenue Procedure 2022-14 on 

page 502 of Internal Revenue Bulletin 2022-7, available at 

IRS.gov/irb/2022-7_IRB#REV-PROC-2022-14 and Revenue Procedure 2023-34 on page 1207 of Internal Revenue 

Bulletin 2023-28, available at IRS.gov/irb/

2023-28_IRB#REV-PROC-2023-24.

Section 481(a) adjustment. If you file Form 3115 and 

change from an impermissible method to a permissible 

method of accounting for depreciation, you can make a 

section 481(a) adjustment for any unclaimed or excess 

amount of allowable depreciation. The adjustment is the 

difference between the total depreciation actually deducted for the property and the total amount allowable prior to 

the year of change. If no depreciation was deducted, the 

adjustment is the total depreciation allowable prior to the 

year of change. A negative section 481(a) adjustment results in a decrease in taxable income. It is taken into account in the year of change and is reported on your business tax returns as “other expenses.” A positive section 

481(a) adjustment results in an increase in taxable income. It is generally taken into account over 4 tax years 

and is reported on your business tax returns as “other income.” However, you can elect to use a 1-year adjustment 

period and report the adjustment in the year of change if 

the total adjustment is less than $50,000. Make the election by completing the appropriate line on Form 3115.

If you file a Form 3115 and change from one permissible method to another permissible method, the section 

481(a) adjustment is zero.

14 Chapter 1 Overview of Depreciation Publication 946 (2023)
2.

Electing the Section 179 

Deduction

Introduction

You can elect to recover all or part of the cost of certain 

qualifying property, up to a limit, by deducting it in the year 

you place the property in service. This is the section 179 

deduction. You can elect the section 179 deduction instead of recovering the cost by taking depreciation deductions.

Estates and trusts cannot elect the section 179 

deduction.

This chapter explains what property does and does not 

qualify for the section 179 deduction, what limits apply to 

the deduction (including special rules for partnerships and 

corporations), and how to elect it. It also explains when 

and how to recapture the deduction.

Useful Items

You may want to see:

Publication

537 Installment Sales

544 Sales and Other Dispositions of Assets

CAUTION

!

 537 

 544 

Form (and Instructions)

Depreciation and Amortization

Sales of Business Property

See How To Get Tax Help for information about getting 

publications and forms.

What Property Qualifies?

Terms you may need to know 

(see Glossary):

Adjusted basis

Basis

Class life

Structural components

Tangible property

To qualify for the section 179 deduction, your property 

must meet all the following requirements.

• It must be eligible property.

• It must be acquired for business use.

• It must have been acquired by purchase.

• It must not be property described later under What 

Property Does Not Qualify.

The following discussions provide information about 

these requirements and exceptions.

 4562 

 4797 

Purpose of Form 4562

This table describes the purpose of the various parts of Form 4562. For more information, see Form 4562 

and its instructions.

Part Purpose

I • Electing the section 179 deduction

• Figuring the maximum section 179 deduction for the current year

• Figuring any section 179 deduction carryover to the next year

II • Reporting the special depreciation allowance for property (other than listed property) placed in 

service during the tax year

• Reporting depreciation deductions on property being depreciated under any method other than 

MACRS

III • Reporting MACRS depreciation deductions for property placed in service before this year

• Reporting MACRS depreciation deductions for property (other than listed property) placed in 

service during the current year

IV • Summarizing other parts

V • Reporting the special depreciation allowance for automobiles and other listed property

• Reporting MACRS depreciation on automobiles and other listed property

• Reporting the section 179 cost elected for automobiles and other listed property

• Reporting information on the use of automobiles and other transportation vehicles

VI • Reporting amortization deductions

Table 1-1.

Publication 946 (2023) Chapter 2 Electing the Section 179 Deduction 15
Eligible Property

To qualify for the section 179 deduction, your property 

must be one of the following types of depreciable property.

1. Tangible personal property.

2. Other tangible property (except buildings and their 

structural components) used as:

a. An integral part of manufacturing, production, or 

extraction, or of furnishing transportation, communications, electricity, gas, water, or sewage disposal services;

b. A research facility used in connection with any of 

the activities in (a) above; or

c. A facility used in connection with any of the activities in (a) for the bulk storage of fungible commodities.

3. Single-purpose agricultural (livestock) or horticultural 

structures. See chapter 7 of Pub. 225 for definitions 

and information regarding the use requirements that 

apply to these structures.

4. Storage facilities (except buildings and their structural 

components) used in connection with distributing petroleum or any primary product of petroleum.

5. Off-the-shelf computer software.

6. Qualified section 179 real property (described below).

Tangible personal property. Tangible personal property 

is any tangible property that is not real property. It includes 

the following property.

• Machinery and equipment.

• Property contained in or attached to a building (other 

than structural components), such as refrigerators, 

grocery store counters, office equipment, printing 

presses, testing equipment, and signs.

• Gasoline storage tanks and pumps at retail service 

stations.

• Livestock, including horses, cattle, hogs, sheep, 

goats, and mink and other furbearing animals.

• Portable air conditioners or heaters placed in service 

by you in tax years beginning after 2015.

• Certain property used predominantly to furnish lodging or in connection with the furnishing of lodging (except as provided in section 50(b)(2)).

The treatment of property as tangible personal property 

for the section 179 deduction is not controlled by its treatment under local law. For example, property may not be 

tangible personal property for the deduction even if treated so under local law, and some property (such as fixtures) may be tangible personal property for the deduction 

even if treated as real property under local law.

Off-the-shelf computer software. Off-the-shelf computer software is qualifying property for purposes of the 

section 179 deduction. This is computer software that is 

readily available for purchase by the general public, is 

subject to a nonexclusive license, and has not been substantially modified. It includes any program designed to 

cause a computer to perform a desired function. However, 

a database or similar item is not considered computer 

software unless it is in the public domain and is incidental 

to the operation of otherwise qualifying software.

Qualified section 179 real property. You can elect to 

treat certain qualified real property you placed in service 

during the tax year as section 179 property. If this election 

is made, the term “section 179 property” will include any 

qualified real property that is:

• Qualified improvement property, as described in section 168(e)(6) of the Internal Revenue Code; and

• Any of the following improvements to nonresidential 

real property placed in service after the date the nonresidential real property was first placed in service.

1. Roofs.

2. Heating, ventilation, and air-conditioning property.

3. Fire protection and alarm systems.

4. Security systems.

For more information, see Special rules for qualified section 179 real property, later.

Qualified improvement property. Generally, this is 

any improvement to an interior portion of a building that is 

nonresidential real property if the improvement is placed 

in service after the date the building was first placed in 

service.

Also, qualified improvement property does not include 

the cost of any improvement attributable to the following.

• The enlargement of the building.

• Any elevator or escalator.

• The internal structural framework of the building.

Property Acquired for Business Use

To qualify for the section 179 deduction, your property 

must have been acquired for use in your trade or business. Property you acquire only for the production of income, such as investment property, rental property (if renting property is not your trade or business), and property 

that produces royalties, does not qualify.

Partial business use. When you use property for both 

business and nonbusiness purposes, you can elect the 

section 179 deduction only if you use the property more 

than 50% for business in the year you place it in service. If 

you use the property more than 50% for business, multiply 

the cost of the property by the percentage of business 

use. Use the resulting business cost to figure your section 

179 deduction.

Example. May Oak bought and placed in service an 

item of section 179 property costing $11,000. May used 

the property 80% for business and 20% for personal 

16 Chapter 2 Electing the Section 179 Deduction Publication 946 (2023)
purposes. The business part of the cost of the property is 

$8,800 (80% (0.80) × $11,000).

Property Acquired by Purchase

To qualify for the section 179 deduction, your property 

must have been acquired by purchase. For example, property acquired by gift or inheritance does not qualify.

Property is not considered acquired by purchase in the 

following situations.

1. It is acquired by one component member of a controlled group from another component member of the 

same group.

2. Its basis is determined either:

a. In whole or in part by its adjusted basis in the 

hands of the person from whom it was acquired, or

b. Under the stepped-up basis rules for property acquired from a decedent.

3. It is acquired from a related person.

Related persons. Related persons are described under 

Related persons, earlier. However, to determine whether 

property qualifies for the section 179 deduction, treat as 

an individual's family only their spouse, ancestors, and lineal descendants and substitute "50%" for "10%" each 

place it appears.

Example. You are a tailor. You bought two industrial 

sewing machines from your father. You placed both machines in service in the same year you bought them. They 

do not qualify as section 179 property because you and 

your father are related persons. You cannot claim a section 179 deduction for the cost of these machines.

What Property Does Not 

Qualify?

Terms you may need to know 

(see Glossary):

Basis

Class life

Certain property does not qualify for the section 179 deduction. This includes the following.

Land and Improvements

Land and land improvements do not qualify as section 179 

property. Land improvements include swimming pools, 

paved parking areas, wharves, docks, bridges, and fences.

Excepted Property

Even if the requirements explained earlier under What 

Property Qualifies? are met, you cannot elect the section 

179 deduction for the following property.

• Certain property you lease to others (if you are a noncorporate lessor).

• Property used predominantly outside the United 

States, except property described in section 168(g)(4) 

of the Internal Revenue Code.

• Property used by certain tax-exempt organizations, 

except property used in connection with the production of income subject to the tax on unrelated trade or 

business income.

• Property used by governmental units or foreign persons or entities, except property used under a lease 

with a term of less than 6 months.

Leased property. Generally, you cannot claim a section 

179 deduction based on the cost of property you lease to 

someone else. This rule does not apply to corporations. 

However, you can claim a section 179 deduction for the 

cost of the following property.

1. Property you manufacture or produce and lease to 

others.

2. Property you purchase and lease to others if both the 

following tests are met.

a. The term of the lease (including options to renew) 

is less than 50% of the property's class life.

b. For the first 12 months after the property is transferred to the lessee, the total business deductions 

you are allowed on the property (other than rents 

and reimbursed amounts) are more than 15% of 

the rental income from the property.

How Much Can You Deduct?

Terms you may need to know 

(see Glossary):

Adjusted basis

Basis

Placed in service

Your section 179 deduction is generally the cost of the 

qualifying property. However, the total amount you can 

elect to deduct under section 179 is subject to a dollar 

limit and a business income limit. These limits apply to 

each taxpayer, not to each business. However, see Married Individuals under Dollar Limits, later. For a passenger 

automobile, the total section 179 deduction and depreciation deduction are limited. See Do the Passenger Automobile Limits Apply? in chapter 5.

Publication 946 (2023) Chapter 2 Electing the Section 179 Deduction 17
If you deduct only part of the cost of qualifying property 

as a section 179 deduction, you can generally depreciate 

the cost you do not deduct.

Trade-in of other property. If you buy qualifying property with cash and a trade-in, its cost, for purposes of the 

section 179 deduction, includes only the cash you paid.

Example. Silver Leaf, a retail bakery, traded in two 

ovens having a total adjusted basis of $680, for a new 

oven costing $1,320. They received an $800 trade-in allowance for the old ovens and paid $520 in cash for the 

new oven. On the date that Silver Leaf traded in the two 

old ovens for the new oven, the old ovens and the new 

oven are classified as real property under the law of the 

state in which the old and new ovens are located and, as a 

result, the old and new ovens are real property for purposes of section 1031. The new oven is section 179 property.

Only the portion of the new oven's basis paid by cash 

qualifies for the section 179 deduction. Therefore, Silver 

Leaf's qualifying cost for the section 179 deduction is 

$520.

Dollar Limits

The total amount you can elect to deduct under section 

179 for most property placed in service in tax years beginning in 2023 generally cannot be more than $1,160,000. If 

you acquire and place in service more than one item of 

qualifying property during the year, you can allocate the 

section 179 deduction among the items in any way, as 

long as the total deduction is not more than $1,160,000. 

You do not have to claim the full $1,160,000.

The amount you can elect to deduct is not affected if you place qualifying property in service in a 

short tax year or if you place qualifying property in 

service for only a part of a 12-month tax year.

After you apply the dollar limit to determine a tentative deduction, you must apply the business income limit (described later) to determine your actual section 179 deduction.

Example. In 2023, you bought and placed in service 

$1,160,000 in machinery and a $25,000 circular saw for 

your business. You elect to deduct $1,135,000 for the machinery and the entire $25,000 for the saw, a total of 

$1,160,000. This is the maximum amount you can deduct. 

Your $25,000 deduction for the saw completely recovered 

its cost. Your basis for depreciation is zero. The basis for 

depreciation of your machinery is $25,000. You figure this 

by subtracting your $1,135,000 section 179 deduction for 

the machinery from the $1,160,000 cost of the machinery.

Situations affecting dollar limit. Under certain circumstances, the general dollar limits on the section 179 deduction may be reduced or increased or there may be adTIP

CAUTION

!

ditional dollar limits. The general dollar limit is affected by 

any of the following situations.

• The cost of your section 179 property placed in service exceeds $2,890,000.

• You placed in service a sport utility or certain other vehicles.

• You are married filing a joint or separate return.

Costs Exceeding $2,890,000

If the cost of your qualifying section 179 property placed in 

service in a year is more than $2,890,000, you must generally reduce the dollar limit (but not below zero) by the 

amount of cost over $2,890,000. If the cost of your section 

179 property placed in service during 2023 is $4,050,000 

or more, you cannot take a section 179 deduction.

Example. In 2023, Jane Ash placed in service machinery costing $2,940,000. This cost is $50,000 more than 

$2,890,000, so Jane must reduce the dollar limit to 

$1,110,000 ($1,160,000 − $50,000).

Sport Utility and Certain Other Vehicles

You cannot elect to expense more than $28,900 of the 

cost of any heavy sport utility vehicle (SUV) and certain 

other vehicles placed in service in tax years beginning in 

2023. This rule applies to any 4-wheeled vehicle primarily 

designed or used to carry passengers over public streets, 

roads, or highways that is rated at more than 6,000 

pounds gross vehicle weight and not more than 14,000 

pounds gross vehicle weight. However, the $28,900 limit 

does not apply to any vehicle:

• Designed to seat more than nine passengers behind 

the driver's seat;

• Equipped with a cargo area (either open or enclosed 

by a cap) of at least 6 feet in interior length that is not 

readily accessible from the passenger compartment; 

or

• That has an integral enclosure fully enclosing the 

driver compartment and load carrying device, does 

not have seating rearward of the driver's seat, and has 

no body section protruding more than 30 inches 

ahead of the leading edge of the windshield.

Married Individuals

If you are married, how you figure your section 179 deduction depends on whether you file jointly or separately. If 

you file a joint return, you and your spouse are treated as 

one taxpayer in determining any reduction to the dollar 

limit, regardless of which of you purchased the property or 

placed it in service. If you and your spouse file separate 

returns, you are treated as one taxpayer for the dollar limit, 

including the reduction for costs over $2,890,000. You 

must allocate the dollar limit (after any reduction) between 

you equally, unless you both elect a different allocation. If 

the percentages elected by each of you do not total 100%, 

50% will be allocated to each of you.

18 Chapter 2 Electing the Section 179 Deduction Publication 946 (2023)
Example. You are married. You and your spouse file 

separate returns. You bought and placed in service 

$2,890,000 of qualified farm machinery in 2023. Your 

spouse has a separate business, and bought and placed 

in service $300,000 of qualified business equipment. Your 

combined dollar limit is $860,000. This is because you 

and your spouse must figure the limit as if you were one 

taxpayer. You reduce the $1,160,000 dollar limit by the 

$300,000 excess of your costs over $2,890,000.

You elect to allocate the $860,000 dollar limit as follows.

• $817,000 ($860,000 x 95% (0.95)) to your machinery.

• $43,000 ($860,000 x 5% (0.05)) to your spouse’s 

equipment.

If you did not make an election to allocate your costs in 

this way, you and your spouse would have to allocate 

$430,000 ($860,000 × 50% (0.50)) to each of you.

Joint return after filing separate returns. If you and 

your spouse elect to amend your separate returns by filing 

a joint return after the due date for filing your return, the 

dollar limit on the joint return is the lesser of the following 

amounts.

• The dollar limit (after reduction for any cost of section 

179 property over $2,890,000).

• The total cost of section 179 property you and your 

spouse elected to expense on your separate returns.

Example. The facts are the same as in the previous 

example, except that you elected to deduct $300,000 of 

the cost of section 179 property on your separate return 

and your spouse elected to deduct $20,000. After the due 

date of your returns, you and your spouse file a joint return. The dollar limit for the section 179 deduction is 

$320,000. This is the lesser of the following amounts.

• $860,000—The dollar limit less the cost of section 179 

property over $2,890,000.

• $320,000—The total you and your spouse elected to 

expense on your separate returns.

Business Income Limit

The total cost you can deduct each year after you apply 

the dollar limit is limited to the taxable income from the active conduct of any trade or business during the year. 

Generally, you are considered to actively conduct a trade 

or business if you meaningfully participate in the management or operations of the trade or business.

Any cost not deductible in 1 year under section 179 because of this limit can be carried to the next year. Special 

rules apply to a deduction of qualified section 179 real 

property that is placed in service by you in tax years beginning before 2016 and disallowed because of the business income limit. See Special rules for qualified section 

179 real property under Carryover of disallowed deduction, later.

Taxable income. In general, figure taxable income for 

this purpose by totaling the net income and losses from all 

trades and businesses you actively conducted during the 

year. Net income or loss from a trade or business includes 

the following items.

• Section 1231 gains (or losses).

• Interest from working capital of your trade or business.

• Wages, salaries, tips, or other pay earned as an employee.

For information about section 1231 gains and losses, see 

chapter 3 of Pub. 544.

In addition, figure taxable income without regard to any 

of the following.

• The section 179 deduction.

• The self-employment tax deduction.

• Any net operating loss carryback or carryforward.

• Any unreimbursed employee business expenses.

Two different taxable income limits. In addition to the 

business income limit for your section 179 deduction, you 

may have a taxable income limit for some other deduction. 

You may have to figure the limit for this other deduction 

taking into account the section 179 deduction. If so, complete the following steps.

Step Action

1 Figure taxable income without the section 179 

deduction or the other deduction.

2 Figure a hypothetical section 179 deduction 

using the taxable income figured in Step 1.

3 Subtract the hypothetical section 179 deduction 

figured in Step 2 from the taxable income 

figured in Step 1.

4 Figure a hypothetical amount for the other 

deduction using the amount figured in Step 3 

as taxable income.

5 Subtract the hypothetical other deduction 

figured in Step 4 from the taxable income 

figured in Step 1.

6 Figure your actual section 179 deduction using 

the taxable income figured in Step 5.

7 Subtract your actual section 179 deduction 

figured in Step 6 from the taxable income 

figured in Step 1.

8 Figure your actual other deduction using the 

taxable income figured in Step 7.

Example. On February 1, 2023, the XYZ Corporation 

purchased and placed in service qualifying section 179 

property that cost $1,160,000. It elects to expense the entire $1,160,000 cost under section 179. In June, the corporation gave a charitable contribution of $10,000. A corporation's limit on charitable contributions is figured after 

subtracting any section 179 deduction. The business income limit for the section 179 deduction is figured after 

subtracting any allowable charitable contributions. XYZ's 

Publication 946 (2023) Chapter 2 Electing the Section 179 Deduction 19
taxable income figured without the section 179 deduction 

or the deduction for charitable contributions is $1,180,000. 

XYZ figures its section 179 deduction and its deduction for 

charitable contributions as follows.

Step 1—Taxable income figured without either deduction is $1,180,000.

Step 2—Using $1,180,000 as taxable income, XYZ's 

hypothetical section 179 deduction is $1,160,000.

Step 3—$20,000 ($1,180,000 − $1,160,000).

Step 4—Using $20,000 (from Step 3) as taxable income, XYZ's hypothetical charitable contribution (limited to 10% of taxable income) is $2,000.

Step 5—$1,178,000 ($1,180,000 − $2,000).

Step 6—Using $1,178,000 (from Step 5) as taxable 

income, XYZ figures the actual section 179 deduction. 

Because the taxable income is at least $1,160,000, 

XYZ can take a $1,160,000 section 179 deduction.

Step 7—$20,000 ($1,180,000 − $1,160,000).

Step 8—Using $20,000 (from Step 7) as taxable income, XYZ's actual charitable contribution (limited to 

10% of taxable income) is $2,000.

Carryover of disallowed deduction. You can carry over 

for an unlimited number of years the cost of any qualified 

section 179 real property that you placed in service in tax 

years beginning after 2015, and that you elected to expense, but were unable to deduct because of the business income limitation. This disallowed deduction amount 

is shown on line 13 of Form 4562. You use the amount you 

carry over to determine your section 179 deduction in the 

next year. Enter that amount on line 10 of your Form 4562 

for the next year.

If you place more than one property in service in a year, 

you can select the properties for which all or a part of the 

costs will be carried forward. Your selections must be 

shown in your books and records. For this purpose, treat 

section 179 costs allocated from a partnership or an S 

corporation as one item of section 179 property. If you do 

not make a selection, the total carryover will be allocated 

equally among the properties you elected to expense for 

the year.

If costs from more than 1 year are carried forward to a 

subsequent year in which only part of the total carryover 

can be deducted, you must deduct the costs being carried 

forward from the earliest year first.

Special rules for qualified section 179 real property. You can carry over to 2024 a 2023 deduction attributable to qualified section 179 real property that you 

placed in service during the tax year and that you elected 

to expense but were unable to take because of the business income limitation. See Carryover of disallowed deduction, earlier. Thus, the amount of any 2023 disallowed 

section 179 expense deduction attributable to qualified 

section 179 real property will be reported on line 13 of 

Form 4562.

If there is a sale or other disposition of your property (including a transfer at death) before you can 

use the full amount of any outstanding carryover 

of your disallowed section 179 deduction, neither you nor 

the new owner can deduct any of the unused amount. Instead, you must add it back to the property's basis.

Partnerships and Partners

The section 179 deduction limits apply both to the partnership and to each partner. The partnership determines its 

section 179 deduction subject to the limits. It then allocates the deduction among its partners.

Each partner adds the amount allocated from partnerships (shown on Schedule K-1 (Form 1065), Partner's 

Share of Income, Deductions, Credits, etc.) to their nonpartnership section 179 costs and then applies the dollar 

limit to this total. To determine any reduction in the dollar 

limit for costs over $2,890,000, the partner does not include any of the cost of section 179 property placed in 

service by the partnership. After the dollar limit (reduced 

for any nonpartnership section 179 costs over 

$2,890,000) is applied, any remaining cost of the partnership and nonpartnership section 179 property is subject to 

the business income limit.

Partnership's taxable income. For purposes of the 

business income limit, figure the partnership's taxable income by adding together the net income and losses from 

all trades or businesses actively conducted by the partnership during the year. See the Instructions for Form 1065 

for information on how to figure partnership net income (or 

loss). However, figure taxable income without regard to 

credits, tax-exempt income, the section 179 deduction, 

and guaranteed payments under section 707(c) of the Internal Revenue Code.

Partner's share of partnership's taxable income. For 

purposes of the business income limit, the taxable income 

of a partner engaged in the active conduct of one or more 

of a partnership's trades or businesses includes their allocable share of taxable income derived from the partnership's active conduct of any trade or business.

Example. In 2023, Beech Partnership placed in service section 179 property with a total cost of $2,940,000. 

The partnership must reduce its dollar limit by $50,000 

($2,940,000 − $2,890,000). Its maximum section 179 deduction is $1,110,000 ($1,160,000 − $50,000), and it 

elects to expense that amount. The partnership's taxable 

income from the active conduct of all its trades or businesses for the year was $1,110,000, so it can deduct the 

full $1,110,000. It allocates $40,000 of its section 179 deduction and $50,000 of its taxable income to Dean, one of 

its partners.

In addition to being a partner in Beech Partnership, 

Dean is also a partner in Cedar Partnership, which allocated to Dean a $30,000 section 179 deduction and $35,000 

of its taxable income from the active conduct of its business. Dean also conducts a business as a sole proprietor 

and, in 2023, placed in service in that business qualifying 

TIP

20 Chapter 2 Electing the Section 179 Deduction Publication 946 (2023)
section 179 property costing $55,000. Dean had a net 

loss of $5,000 from that business for the year.

Dean does not have to include section 179 partnership 

costs to figure any reduction in the dollar limit, so the total 

section 179 costs for the year are not more than 

$2,890,000 and the dollar limit is not reduced. Dean’s 

maximum section 179 deduction is $1,160,000. Dean 

elects to expense all of the $70,000 in section 179 deductions allocated from the partnerships ($40,000 from Beech 

Partnership plus $30,000 from Cedar Partnership), plus 

$55,000 of the sole proprietorship's section 179 costs, 

and notes that information in the books and records. However, Dean’s deduction is limited to the business taxable 

income of $80,000 ($50,000 from Beech Partnership, plus 

$35,000 from Cedar Partnership, minus $5,000 loss from 

Dean’s sole proprietorship). Dean carries over $45,000 

($125,000 − $80,000) of the elected section 179 costs to 

2024. Dean allocates the carryover amount to the cost of 

section 179 property placed in service in Dean’s sole proprietorship, and notes that allocation in the books and records.

Different tax years. For purposes of the business income limit, if the partner's tax year and that of the partnership differ, the partner's share of the partnership's taxable 

income for a tax year is generally the partner's distributive 

share for the partnership tax year that ends with or within 

the partner's tax year.

Example. John and James Oak are equal partners in 

Oak Partnership. Oak Partnership uses a tax year ending 

January 31. John and James both use a tax year ending 

December 31. For its tax year ending January 31, 2023, 

Oak Partnership's taxable income from the active conduct 

of its business is $80,000, of which $70,000 was earned 

during 2022. John and James each include $40,000 (each 

partner's entire share) of partnership taxable income in 

computing their business income limit for the 2023 tax 

year.

Adjustment of partner's basis in partnership. A partner must reduce the basis of their partnership interest by 

the total amount of section 179 expenses allocated from 

the partnership even if the partner cannot currently deduct 

the total amount. If the partner disposes of their partnership interest, the partner's basis for determining gain or 

loss is increased by any outstanding carryover of disallowed section 179 expenses allocated from the partnership.

Adjustment of partnership's basis in section 179 

property. The basis of a partnership's section 179 property must be reduced by the section 179 deduction elected by the partnership. This reduction of basis must be 

made even if a partner cannot deduct all or part of the 

section 179 deduction allocated to that partner by the 

partnership because of the limits.

S Corporations

Generally, the rules that apply to a partnership and its 

partners also apply to an S corporation and its 

shareholders. The deduction limits apply to an S corporation and to each shareholder. The S corporation allocates 

its deduction to the shareholders who then take their section 179 deduction subject to the limits.

Figuring taxable income for an S corporation. To figure taxable income (or loss) from the active conduct by an 

S corporation of any trade or business, you total the net income and losses from all trades or businesses actively 

conducted by the S corporation during the year.

To figure the net income (or loss) from a trade or business actively conducted by an S corporation, you take into 

account the items from that trade or business that are 

passed through to the shareholders and used in determining each shareholder's tax liability. However, you do not 

take into account any credits, tax-exempt income, the section 179 deduction, and deductions for compensation paid 

to shareholder-employees. For purposes of determining 

the total amount of S corporation items, treat deductions 

and losses as negative income. In figuring the taxable income of an S corporation, disregard any limits on the 

amount of an S corporation item that must be taken into 

account when figuring a shareholder's taxable income.

Other Corporations

A corporation's taxable income from its active conduct of 

any trade or business is its taxable income figured with the 

following changes.

1. It is figured before deducting the section 179 deduction, any net operating loss deduction, and special deductions (as reported on the corporation's income tax 

return).

2. It is adjusted for items of income or deduction included in the amount figured in (1) not derived from a 

trade or business actively conducted by the corporation during the tax year.

How Do You Elect the 

Deduction?

Terms you may need to know 

(see Glossary):

Listed property

Placed in service

Election. You elect to take the section 179 deduction by 

completing Part I of Form 4562.

If you elect the deduction for listed property (described in chapter 5), complete Part V of Form 

CAUTION

4562 before completing Part I.

!

Publication 946 (2023) Chapter 2 Electing the Section 179 Deduction 21
For property placed in service in 2023, file Form 4562 

with either of the following.

• Your original 2023 tax return, whether or not you file it 

timely.

• An amended return for 2023 filed within the time prescribed by law. An election made on an amended return must specify the item of section 179 property to 

which the election applies and the part of the cost of 

each such item to be taken into account. The amended return must also include any resulting adjustments to taxable income.

You must keep records that show the specific 

identification of each piece of qualifying section 

179 property. These records must show how you 

acquired the property, the person you acquired it from, 

and when you placed it in service.

Election for qualified section 179 real property. You 

can elect to expense certain qualified real property that 

you placed in service as section 179 property for tax years 

beginning in 2023. For more information, see Election 

above. Also, see Revenue Procedure 2019-8 on page 347 

of Internal Revenue Bulletin 2019-3, available at 

IRS.gov/irb/2019-03_IRB#RP-2019-08.

Revoking an election. An election (or any specification 

made in the election) to take a section 179 deduction for 

2023 can be revoked without IRS approval by filing an 

amended return. The amended return must be filed within 

the time prescribed by law. The amended return must also 

include any resulting adjustments to taxable income. 

Once made, the revocation is irrevocable.

When Must You Recapture the 

Deduction?

Terms you may need to know 

(see Glossary):

Disposition

Exchange

Recapture

Recovery period

Section 1245 property

You may have to recapture the section 179 deduction if, in 

any year during the property's recovery period, the percentage of business use drops to 50% or less. In the year 

the business use drops to 50% or less, you include the recapture amount as ordinary income in Part IV of Form 

4797. You also increase the basis of the property by the 

recapture amount. Recovery periods for property are discussed under Which Recovery Period Applies? in chapter 4.

RECORDS

If you sell, exchange, or otherwise dispose of the 

property, do not figure the recapture amount under the rules explained in this discussion. Instead, 

use the rules for recapturing depreciation explained in 

chapter 3 of Pub. 544 under Section 1245 Property. For 

qualified real property, see Notice 2013-59 for determining 

the portion of the gain that is attributable to section 1245 

property upon the sale or other disposition of qualified real 

property. You can find Notice 2013-59 at IRS.gov/irb/

2013-40_IRB/ar14.html.

If the property is listed property (described in 

chapter 5), do not figure the recapture amount under the rules explained in this discussion when 

the percentage of business use drops to 50% or less. Instead, use the rules for recapturing excess depreciation in 

chapter 5 under What Is the Business-Use Requirement.

Figuring the recapture amount. To figure the amount to 

recapture, take the following steps.

1. Figure the depreciation that would have been allowable on the section 179 deduction you claimed. Begin 

with the year you placed the property in service and 

include the year of recapture.

2. Subtract the depreciation figured in (1) from the section 179 deduction you claimed. The result is the 

amount you must recapture.

Example. In January 2021, Paul Lamb, a calendar 

year taxpayer, bought and placed in service section 179 

property costing $10,000. The property is not listed property. The property is 3-year property. Paul elected a 

$5,000 section 179 deduction for the property and also 

elected not to claim a special depreciation allowance. Paul 

used the property only for business in 2021 and 2022. In 

2023, Paul used the property 40% for business and 60% 

for personal use. Paul figures the recapture amount as follows.

Section 179 deduction claimed (2019) ........ $5,000.00

Minus: Allowable depreciation using Table A-1

(instead of section 179 deduction):

2021 .........................$1,666.50

2022 ......................... 2,222.50

2023 ($740.50 × 40% (0.40)

(business)) .................... 296.20 4,185.20

2023 — Recapture amount............... $814.80

Paul must include $814.80 in income for 2023.

If any qualified zone property placed in service 

during a particular year ceases to be used in an 

empowerment zone by an enterprise zone business in a later year, the benefit of the increased section 

179 deduction must be reported as other income on your 

return.

CAUTION

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CAUTION

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CAUTION

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22 Chapter 2 Electing the Section 179 Deduction Publication 946 (2023)
3.

Claiming the Special 

Depreciation Allowance

Introduction

You can take a special depreciation allowance to recover 

part of the cost of qualified property (defined next) placed 

in service during the tax year. The allowance applies only 

for the first year you place the property in service. The allowance is an additional deduction you can take after any 

section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service.

This chapter explains what is qualified property. It also 

includes rules regarding how to figure an allowance, how 

to elect not to claim an allowance, and when you must recapture an allowance.

See How To Get Tax Help for information about getting 

publications and forms.

What Is Qualified Property?

Terms you may need to know 

(see Glossary):

Business/investment use

Improvement

Nonresidential real property

Placed in service

Residential rental property

Structural components

Your property is qualified property if it is one of the following.

• Qualified reuse and recycling property.

• Certain qualified property acquired after September 

27, 2017.

• Certain plants bearing fruits and nuts.

The following discussions provide information about the 

types of qualified property listed above for which you can 

take the special depreciation allowance.

Qualified Reuse and Recycling 

Property

You can take a 50% special depreciation allowance for 

qualified reuse and recycling property. Qualified reuse and 

recycling property is any machinery or equipment (not including buildings or real estate), along with any appurtenance, that is used exclusively to collect, distribute, or recycle qualified reuse and recyclable materials (as defined 

in section 168(m)(3)(B) of the Internal Revenue Code). 

Qualified reuse and recycling property also includes software necessary to operate such equipment. The property 

must meet the following requirements.

• The property must be depreciated under MACRS.

• The property must have a useful life of at least 5 years.

• The original use of the property must begin with you 

after August 31, 2008.

• You must have acquired the property by purchase (as 

discussed under Property Acquired by Purchase in 

chapter 2) after August 31, 2008, with no binding written contract for the acquisition in effect before September 1, 2008.

• The property must be placed in service for use in your 

trade or business after August 31, 2008.

Excepted Property

Qualified reuse and recycling property does not include 

any of the following.

• Any rolling stock or other equipment used to transport 

reuse or recyclable materials.

• Property required to be depreciated using the Alternative Depreciation System (ADS). For other property required to be depreciated using ADS, see Required 

use of ADS under Which Depreciation System (GDS 

or ADS) Applies? in chapter 4.

• Other bonus depreciation property to which section 

168(k) of the Internal Revenue Code applies.

• Property for which you elected not to claim any special 

depreciation allowance (discussed later).

• Property placed in service and disposed of in the 

same tax year.

• Property converted from business use to personal use 

in the same tax year acquired. Property converted 

from personal use to business use in the same or later 

tax year may be qualified reuse and recycling property.

Certain Qualified Property Acquired 

After September 27, 2017

You can elect to take an 80% special depreciation allowance for property acquired after September 27, 2017, and 

placed in service after December 31, 2022, and before 

January 1, 2024 (other than certain property with a long 

production period and certain aircraft). You can elect to 

take a 100% special depreciation allowance for certain 

property with a long production period and certain aircraft 

placed in service before January 1, 2024. Your property is 

qualified property if it meets the following.

• Tangible property depreciated under MACRS with a 

recovery period of 20 years or less.

Publication 946 (2023) Chapter 3 Claiming the Special Depreciation Allowance 23
• Computer software defined in and depreciated under 

section 167(f)(1) of the Internal Revenue Code.

• Water utility property.

• Qualified film, television, and live theatrical productions, as defined in sections 181(d) and (e) of the Internal Revenue Code.

• A specified plant for which you made the election to 

apply section 168(k)(5) for the tax year in which the 

plant is planted or grafted (explained later under Certain Plants Bearing Fruits and Nuts).

• It is not excepted property (explained later under Excepted Property).

Qualified property must also be placed in service before January 1, 2027 (or before January 1, 2028, for certain property with a long production period and for certain 

aircraft), and can be either new property or certain used 

property.

Note. For certain qualified property acquired after September 27, 2017, and placed in service after December 

31, 2023, and before January 1, 2025 (other than certain 

property with a long production period and certain aircraft), you can elect to take a 60% special depreciation allowance. For certain property with a long production period and certain aircraft placed in service after December 

31, 2023, and before January 1, 2025, you can elect to 

take an 80% special depreciation allowance.

Long Production Period Property

To be qualified property, long production period property 

must meet the following requirements.

• The property has a recovery period of at least 10 

years or is transportation property. Transportation 

property is tangible personal property used in the 

trade or business of transporting persons or property.

• The property is subject to section 263A of the Internal 

Revenue Code.

• The property has an estimated production period exceeding 1 year and an estimated production cost exceeding $1 million.

• You must have acquired the property, or acquired the 

property pursuant to a written contract entered into, 

before January 1, 2027.

See section 168(k)(2)(B) of the Internal Revenue Code.

Noncommercial Aircraft

To be qualified property, noncommercial aircraft must 

meet the following requirements.

• The aircraft must not be tangible personal property 

used in the trade or business of transporting persons 

or property (except for agricultural or firefighting purposes).

• The aircraft must be purchased (as discussed under 

Property Acquired by Purchase in chapter 2) by a 

purchaser who at the time of the contract for purchase 

makes a nonrefundable deposit of the lesser of 10% 

of the cost or $100,000.

• The aircraft must have an estimated production period 

exceeding 4 months and a cost exceeding $200,000.

• You must have acquired the aircraft, or acquired the 

aircraft pursuant to a written contract entered into, before January 1, 2027.

See section 168(k)(2)(C) of the Internal Revenue Code.

Special Rules

Syndicated leasing transactions. If qualified property 

is originally placed in service by a lessor, the property is 

sold within 3 months of the date it was placed in service, 

and the user of the property does not change, then the 

property is treated as originally placed in service by the 

taxpayer no earlier than the date of the last sale.

Multiple units of property subject to the same lease will 

be treated as originally placed in service no earlier than 

the date of the last sale if the property is sold within 3 

months after the final unit is placed in service and the period between the time the first and last units are placed in 

service does not exceed 12 months.

Excepted Property

Qualified property acquired after September 27, 2017, 

does not include any of the following.

• Property placed in service, or planted or grafted, and 

disposed of in the same tax year.

• Property converted from business use to personal use 

in the same tax year acquired. Property converted 

from personal use to business use in the same or later 

tax year may be qualified property.

• Property required to be depreciated under the Alternative Depreciation System (ADS). This includes listed 

property used 50% or less in a qualified business use. 

For other property required to be depreciated using 

ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies? in chapter 4.

• Property for which you elected not to claim any special 

depreciation allowance (discussed later).

• Property described in section 168(k)(9)(A) and placed 

in service in any tax year beginning after December 

31, 2017.

• Property described in section 168(k)(9)(B) and placed 

in service in any tax year beginning after December 

31, 2017.

Certain Plants Bearing Fruits 

and Nuts

You can elect to claim an 80% special depreciation allowance for the adjusted basis of certain specified plants 

24 Chapter 3 Claiming the Special Depreciation Allowance Publication 946 (2023)
(defined later) bearing fruits and nuts planted or grafted 

after December 31, 2022, and before January 1, 2024.

A specified plant is:

• Any tree or vine that bears fruits or nuts, and

• Any other plant that will have more than one yield of 

fruits or nuts and generally has a pre-productive period of more than 2 years from planting or grafting to 

the time it begins bearing fruits or nuts.

Any property planted or grafted outside the United 

States does not qualify as a specified plant.

If you elect to claim the special depreciation allowance 

for any specified plant, the special depreciation allowance 

applies only for the tax year in which the plant is planted or 

grafted. The plant will not be treated as qualified property 

eligible for the special depreciation allowance in the subsequent tax year in which it is placed in service.

To make the election, attach a statement to your timely 

filed return (including extensions) for the tax year in which 

you plant or graft the specified plant(s), indicating you are 

electing to apply section 168(k)(5) and identifying the 

specified plant(s) for which you are making the election. 

The election once made cannot be revoked without IRS 

consent.

Note. For certain specified plants bearing fruits and 

nuts planted or grafted after December 31, 2023, and before January 1, 2025, you can elect to claim a 60% special 

depreciation allowance.

See section 168(k)(5) of the Internal Revenue Code.

How Much Can You Deduct?

Terms you may need to know 

(see Glossary):

Adjusted basis

Basis

Placed in service

Figure the special depreciation allowance by multiplying 

the depreciable basis of qualified reuse and recycling 

property, certain qualified property acquired after September 27, 2017, and certain plants bearing fruits and nuts by 

the applicable percentage.

For qualified property other than listed property, enter 

the special depreciation allowance on Form 4562, Part II, 

line 14. For qualified property that is listed property, enter 

the special depreciation allowance on Form 4562, Part V, 

line 25.

If you place qualified property in service in a short 

tax year, you can take the full amount of a special 

depreciation allowance.

TIP

Depreciable basis. This is the property's cost or other 

basis multiplied by the percentage of business/investment 

use, reduced by the total amount of any credits and deductions allocable to the property.

The following are examples of some credits and deductions that reduce depreciable basis.

• Any section 179 deduction.

• Any deduction for removal of barriers to the disabled 

and the elderly.

• Any disabled access credit, enhanced oil recovery 

credit, and credit for employer-provided childcare facilities and services.

• Basis adjustment to investment credit property under 

section 50(c) of the Internal Revenue Code.

• Section 181 expense deduction.

For additional credits and deductions that affect basis, 

see section 1016 of the Internal Revenue Code.

For information about how to determine the cost or 

other basis of property, see What Is the Basis of Your Depreciable Property? in chapter 1. For a discussion of business/investment use, see Partial business or investment 

use under Property Used in Your Business or Income-Producing Activity in chapter 1.

Depreciating the remaining cost. After you figure your 

special depreciation allowance for your qualified property, 

you can use the remaining cost to figure your regular 

MACRS depreciation deduction (discussed in chapter 4). 

Therefore, you must reduce the depreciable basis of the 

property by the special depreciation allowance before figuring your regular MACRS depreciation deduction.

Example. On July 1, 2023, you placed in service in 

your business qualified property (that is not long production period property or certain aircraft) that cost $450,000 

and that you acquired after September 27, 2017. You did 

not elect to claim a section 179 deduction. You deduct 

80% of the cost ($360,000) as a special depreciation allowance for 2023. You use the remaining cost of the property to figure a regular MACRS depreciation deduction for 

your property for 2023 and later years.

Like-kind exchanges and involuntary conversions. If 

you acquired qualified property in a like-kind exchange or 

involuntary conversion after September 27, 2017, and the 

qualified property is new property, the carryover basis and 

any excess basis of the acquired property is eligible for 

the special depreciation allowance.

If you acquired qualified property in a like-kind exchange or involuntary conversion after September 27, 

2017, and the qualified property is used property, only the 

excess basis of the acquired property is eligible for the 

special depreciation allowance. After you figure your special depreciation allowance, you can use the remaining 

carryover basis to figure your regular MACRS depreciation 

deduction. See Figuring the Deduction for Property Acquired in a Nontaxable Exchange in chapter 4 under How 

Is the Depreciation Deduction Figured.

Publication 946 (2023) Chapter 3 Claiming the Special Depreciation Allowance 25
How Can You Elect Not To 

Claim an Allowance?

You can elect, for any class of property, not to deduct any 

special depreciation allowances for all property in such 

class placed in service during the tax year.

To make an election, attach a statement to your return 

indicating what election you are making and the class of 

property for which you are making the election.

The election must be made separately by each person 

owning qualified property (for example, by the partnerships, by the S corporation, or for each member of a consolidated group by the common parent of the group).

When to make election. Generally, you must make the 

election on a timely filed tax return (including extensions) 

for the year in which you place the property in service.

However, if you timely filed your return for the year without making the election, you can still make the election by 

filing an amended return within 6 months of the due date 

of the original return (not including extensions). Attach the 

election statement to the amended return. On the amended return, write “Filed pursuant to section 301.9100-2.”

Revoking an election. Once you elect not to deduct a 

special depreciation allowance for a class of property, you 

cannot revoke the election without IRS consent. A request 

to revoke the election is a request for a letter ruling.

If you elect not to have any special depreciation 

allowance apply, the property placed in service after 2015 will not be subject to an alternative minimum tax adjustment for depreciation.

When Must You Recapture an 

Allowance?

When you dispose of property for which you claimed a 

special depreciation allowance, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the amount of the special depreciation 

allowance previously allowed or allowable. See When Do 

You Recapture MACRS Depreciation? in chapter 4 for 

more information.

Recapture of allowance deducted for qualified GO 

Zone property. If, in any year after the year you claim the 

special depreciation allowance for qualified GO Zone 

property (including specified GO Zone extension property), the property ceases to be used in the GO Zone, you 

may have to recapture as ordinary income the excess 

benefit you received from claiming the special depreciation allowance. For additional guidance, see Notice 

2008-25 on page 484 of Internal Revenue Bulletin 2008-9, 

available at IRS.gov/irb/2008-09_IRB/index.html.

CAUTION

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Qualified cellulosic biomass ethanol plant property, 

qualified cellulosic biofuel plant property, and qualified second generation biofuel plant property. If, in 

any year after the year you claim the special depreciation 

allowance for any qualified cellulosic biomass ethanol 

plant property, qualified cellulosic biofuel plant property, or 

qualified second generation biofuel plant property, the 

property ceases to be qualified cellulosic biomass ethanol 

plant property, qualified cellulosic biofuel plant property, or 

qualified second generation biofuel plant property, you 

may have to recapture as ordinary income the excess 

benefit you received from claiming the special depreciation allowance.

Recapture of allowance for qualified Recovery Assistance property. If, in any year after the year you claim 

the special depreciation allowance for qualified Recovery 

Assistance property, the property ceases to be used in the 

Kansas disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. For additional 

guidance, see Notice 2008-67 on page 307 of Internal 

Revenue Bulletin 2008-32, available at IRS.gov/irb/

2008-32_IRB/index.html.

Recapture of allowance for qualified disaster assistance property. If, in any year after the year you claim 

the special depreciation allowance for qualified disaster 

assistance property, the property ceases to be used in the 

applicable disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance.

4.

Figuring Depreciation 

Under MACRS

Introduction

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.

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 

CAUTION

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26 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
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.

Useful Items

You may want to see:

Publication

Farmer's Tax Guide

Travel, Gift, and Car Expenses

Sales and Other Dispositions of Assets

Basis of Assets

Business Use of Your Home

Form (and Instructions)

Employee Business Expenses

Depreciation and Amortization

See How To Get Tax Help for information about getting 

publications and forms.

Which Depreciation System 

(GDS or ADS) Applies?

Terms you may need to know 

(see Glossary):

Listed property

Nonresidential real property

Placed in service

Property class

Recovery period

Residential rental property

Tangible property

Tax exempt

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 must generally 

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 2023, complete 

Part III of Form 4562 to report depreciation using MACRS. 

Complete Section B of Part III to report depreciation using 

 225 

 463 

 544 

 551 

 587 

 2106 

 4562 

GDS, and complete Section C of Part III to report depreciation using ADS. If you placed your property in service before 2023 and are required to file Form 4562, report depreciation using either GDS or ADS on line 17 in Part III.

Required use of ADS. You must use ADS for the following property.

• Nonresidential real property, residential real property, 

and qualified improvement property held by an electing real property trade or business (as defined in section 163(j)(7)(B) of the Internal Revenue Code). For 

more information, see Revenue Procedure 2019-8 on 

page 347 of Internal Revenue Bulletin 2019-3, available at IRS.gov/irb/2019-03_IRB#RP-2019-08, as 

modified by Revenue Procedure 2021-28 on page 5 of 

Internal Revenue Bulletin 2021-27, available at 

IRS.gov/irb/2021-27_IRB#RP-2021-28.

• Any property with a recovery period of 10 years or 

more under GDS held by an electing farming business 

(as defined in section 163(j)(7)(C) of the Internal Revenue Code). For more information, see Revenue Procedure 2019-8 on page 347 of Internal Revenue Bulletin 2019-3, available at IRS.gov/irb/

2019-03_IRB#RP-2019-08.

• Any tax-exempt use property.

• Any tax-exempt bond-financed property.

• All property used predominantly in a farming business 

and placed in service in any tax year during which an 

election not to apply the uniform capitalization rules to 

certain farming costs is in effect.

• Any property imported from a foreign country for which 

an Executive order is in effect because the country 

maintains trade restrictions or engages in other discriminatory acts.

• Any tangible property used predominantly outside the 

United States during the tax year.

• Any listed property used 50% or less in a qualified 

business use during the tax year (discussed later in 

chapter 5).

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.

Electing ADS. Although your property may qualify for 

GDS, you can elect to use ADS. The election must generally 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 Form 4562, Part 

III, line 20.

CAUTION

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Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 27
Which Property Class Applies 

Under GDS?

Terms you may need to know 

(see Glossary):

Class life

Nonresidential real property

Placed in service

Property class

Recovery period

Residential rental property

Section 1245 property

Section 1250 property

The following is a list of the nine property classifications 

under GDS and examples of the types of property included in each class. These property classes are also listed 

under column (a) in Section B of Part III of Form 4562. For 

detailed information on property classes, see Appendix B, 

Table of Class Lives and Recovery Periods, in this publication.

1. 3-year property.

a. Tractor units for over-the-road use.

b. Any race horse over 2 years old when placed in 

service.

c. Any other horse (other than a race horse) over 12 

years old when placed in service.

d. Qualified rent-to-own property (defined later).

2. 5-year property.

a. Automobiles, taxis, buses, and trucks.

b. Any qualified technological equipment.

c. Office machinery (such as typewriters, calculators, 

and copiers).

d. Any property used in research and experimentation.

e. Breeding cattle and dairy cattle.

f. Appliances, carpets, furniture, etc., used in a residential rental real estate activity.

g. Certain geothermal, solar, and wind energy property.

h. Any machinery equipment (other than any grain 

bin, cotton ginning asset, fence, or other land improvement) used in a farming business and placed 

in service after 2017, in tax years ending after 

2017. The original use of the property must begin 

with you after 2017.

3. 7-year property.

a. Office furniture and fixtures (such as desks, files, 

and safes).

b. Used agricultural machinery and equipment 

placed in service after 2017, grain bins, cotton ginning assets, or fences used in a farming business 

(but no other land improvements).

c. Railroad track.

d. Any property that does not have a class life and 

has not been designated by law as being in any 

other class.

e. Certain motorsports entertainment complex property (defined later).

f. Any natural gas gathering line placed in service after April 11, 2005. See Natural gas gathering line 

and electric transmission property, later.

4. 10-year property.

a. Vessels, barges, tugs, and similar water transportation equipment.

b. Any single-purpose agricultural or horticultural 

structure.

c. Any tree or vine bearing fruits or nuts.

d. Qualified small electric meter and qualified smart 

electric grid system (defined later) placed in service on or after October 3, 2008.

5. 15-year property.

a. Certain improvements made directly to land or 

added to it (such as shrubbery, fences, roads, 

sidewalks, and bridges).

b. Any retail motor fuels outlet (defined later), such 

as a convenience store.

c. Any municipal wastewater treatment plant.

d. Initial clearing and grading land improvements for 

gas utility property.

e. Electric transmission property (that is section 1245 

property) used in the transmission at 69 or more 

kilovolts of electricity placed in service after April 

11, 2005. See Natural gas gathering line and electric transmission property, later.

f. Any natural gas distribution line placed in service 

after April 11, 2005, and before January 1, 2011.

g. Any telephone distribution plant and comparable 

equipment used for 2-way exchange of voice and 

data communications.

h. Qualified improvement property (defined later) 

placed in service after 2017.

6. 20-year property.

a. Farm buildings (other than single-purpose agricultural or horticultural structures).

28 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
b. Municipal sewers not classified as 25-year property.

c. Initial clearing and grading land improvements for 

electric utility transmission and distribution plants.

7. 25-year property. This class is water utility property, 

which is either of the following.

a. Property that is an integral part of the gathering, 

treatment, or commercial distribution of water, and 

that, without regard to this provision, would be 

20-year property.

b. Municipal sewers other than property placed in 

service under a binding contract in effect at all 

times since June 9, 1996.

8. Residential rental property. This is any building or 

structure, such as a rental home (including a mobile 

home), if 80% or more of its gross rental income for 

the tax year is from dwelling units. A dwelling unit is a 

house or apartment used to provide living accommodations in a building or structure. It does not include a 

unit in a hotel, motel, or other establishment where 

more than half the units are used on a transient basis. 

If you occupy any part of the building or structure for 

personal use, its gross rental income includes the fair 

rental value of the part you occupy.

9. Nonresidential real property. This is section 1250 

property, such as an office building, store, or warehouse, that is neither residential rental property nor 

property with a class life of less than 27.5 years.

Qualified rent-to-own property. Qualified rent-to-own 

property is property held by a rent-to-own dealer for purposes of being subject to a rent-to-own contract. It is tangible personal property generally used in the home for 

personal use. It includes computers and peripheral equipment, televisions, videocassette recorders, stereos, camcorders, appliances, furniture, washing machines and dryers, refrigerators, and other similar consumer durable 

property. Consumer durable property does not include 

real property, aircraft, boats, motor vehicles, or trailers.

If some of the property you rent to others under a 

rent-to-own agreement is of a type that may be used by 

the renters for either personal or business purposes, you 

can still treat this property as qualified property as long as 

it does not represent a significant portion of your leasing 

property. However, if this dual-use property does represent a significant portion of your leasing property, you 

must prove that this property is qualified rent-to-own property.

Rent-to-own dealer. You are a rent-to-own dealer if 

you meet all the following requirements.

• You regularly enter into rent-to-own contracts (defined 

below) in the ordinary course of your business for the 

use of consumer property.

• A substantial portion of these contracts end with the 

customer returning the property before making all the 

payments required to transfer ownership.

• The property is tangible personal property of a type 

generally used within the home for personal use.

Rent-to-own contract. This is any lease for the use of 

consumer property between a rent-to-own dealer and a 

customer who is an individual, which meets all of the following requirements.

• Is titled “Rent-to-Own Agreement,” “Lease Agreement 

with Ownership Option,” or other similar language.

• Provides a beginning date and a maximum period of 

time, not to exceed 156 weeks or 36 months from the 

beginning date, for which the contract can be in effect 

(including renewals or options to extend).

• Provides for regular periodic (weekly or monthly) payments that can be either level or decreasing. If the 

payments are decreasing, no payment can be less 

than 40% of the largest payment.

• Provides for total payments that generally exceed the 

normal retail price of the property plus interest.

• Provides for total payments that do not exceed 

$10,000 for each item of property.

• Provides that the customer has no legal obligation to 

make all payments outlined in the contract and that, at 

the end of each weekly or monthly payment period, 

the customer can either continue to use the property 

by making the next payment or return the property in 

good working order with no further obligations and no 

entitlement to a return of any prior payments.

• Provides that legal title to the property remains with 

the rent-to-own dealer until the customer makes either 

all the required payments or the early purchase payments required under the contract to acquire legal title.

• Provides that the customer has no right to sell, sublease, mortgage, pawn, pledge, or otherwise dispose 

of the property until all contract payments have been 

made.

Motorsports entertainment complex. This is a racing 

track facility permanently situated on land that hosts one 

or more racing events for automobiles, trucks, or motorcycles during the 36-month period after the first day of the 

month in which the facility is placed in service. The events 

must be open to the public for the price of admission.

Qualified smart electric grid system. A qualified smart 

electric grid system means any smart grid property used 

as part of a system for electric distribution grid communications, monitoring, and management placed in service 

after October 3, 2008, by a taxpayer who is a supplier of 

electrical energy or a provider of electrical energy services. Smart grid property includes electronics and related 

equipment that is capable of:

• Sensing, collecting, and monitoring data of or from all 

portions of a utility's electric distribution grid;

• Providing real-time, two-way communications to monitor or to manage the grid; and

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 29
• Providing real-time analysis of an event prediction 

based on collected data that can be used to provide 

electric distribution system reliability, quality, and performance.

Retail motor fuels outlet. Real property is a retail motor 

fuels outlet if it is used to a substantial extent in the retail 

marketing of petroleum or petroleum products (whether or 

not it is also used to sell food or other convenience items) 

and meets any one of the following three tests.

• It is not larger than 1,400 square feet.

• 50% or more of the gross revenues generated from 

the property are derived from petroleum sales.

• 50% or more of the floor space in the property is devoted to petroleum marketing sales.

A retail motor fuels outlet does not include any facility related to petroleum and natural gas trunk pipelines.

Qualified improvement property. Generally, this is any 

improvement to an interior part of a building that is nonresidential real property, and the improvement is section 1250 

property, is made by you, and is placed in service by you 

after 2017 and after the date the building was first placed 

in service by any person.

However, a qualified improvement does not include any 

improvement for which the expenditure is attributable to 

any of the following.

• The enlargement of the building.

• Any elevator or escalator.

• The internal structural framework of the building.

Qualified smart electric meter. A qualified smart electric meter is any time-based meter and related communication equipment, which is placed in service by a supplier 

of electric energy or a provider of electric energy services 

and which is capable of being used by you as part of a 

system that meets all of the following requirements.

• Measures and records electricity usage data on a 

time-differentiated basis in at least 24 separate time 

segments per day.

• Provides for the exchange of information between the 

supplier or provider and the customer's smart electric 

meter in support of time-based rates or other forms of 

demand response.

• Provides data to the supplier or provider so that the 

supplier or provider can provide energy usage information to customers electronically.

• Provides all commercial and residential customers of 

such supplier or provider with net metering. Net metering means allowing a customer a credit, if any, as 

complies with applicable federal and state laws and 

regulations for providing electricity to the supplier or 

provider.

Natural gas gathering line and electric transmission 

property. Any natural gas gathering line placed in service 

after April 11, 2005, is treated as 7-year property, and 

electric transmission property (that is section 1245 property) used in the transmission at 69 or more kilovolts of 

electricity and any natural gas distribution line placed in 

service after April 11, 2005, are treated as 15-year property, if the following requirements are met.

• The original use of the property must have begun with 

you after April 11, 2005. Original use means the first 

use to which the property is put, whether or not by 

you. Therefore, property used by any person before 

April 12, 2005, is not original use. Original use includes additional capital expenditures you incurred to 

recondition or rebuild your property. However, original 

use does not include the cost of reconditioned or rebuilt property you acquired. Property containing used 

parts will not be treated as reconditioned or rebuilt if 

the cost of the used parts is not more than 20% of the 

total cost of the property.

• The property must not be placed in service under a 

binding contract in effect before April 12, 2005.

• The property must not be self-constructed property 

(property you manufacture, construct, or produce for 

your own use), if you began the manufacture, construction, or production of the property before April 12, 

2005. Property that is manufactured, constructed, or 

produced for your use by another person under a written binding contract entered into by you or a related 

party before the manufacture, construction, or production of the property is considered to be manufactured, 

constructed, or produced by you.

What Is the Placed in Service 

Date?

Terms you may need to know 

(see Glossary):

Placed in service

You begin to claim depreciation when your property is 

placed in service for either use in a trade or business or 

the production of income. The placed in service date for 

your property is the date the property is ready and available for a specific use. It is therefore not necessarily the 

date it is first used. If you converted property held for personal use to use in a trade or business or for the production of income, treat the property as being placed in service on the conversion date. See Placed in Service under 

When Does Depreciation Begin and End? in chapter 1 for 

examples illustrating when property is placed in service.

30 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
What Is the Basis for 

Depreciation?

Terms you may need to know 

(see Glossary):

Basis

The basis for depreciation of MACRS property is the property's cost or other basis multiplied by the percentage of 

business/investment use. For a discussion of business/

investment use, see Partial business or investment use 

under Property Used in Your Business or Income-Producing Activity in chapter 1. Reduce that amount by any credits and deductions allocable to the property. The following 

are examples of some credits and deductions that reduce 

basis.

• Any deduction for section 179 property.

• Any deduction under section 179B of the Internal Revenue Code for capital costs to comply with Environmental Protection Agency sulfur regulations.

• Any deduction under section 179D of the Internal Revenue Code for certain energy efficient commercial 

building property.

• Any deduction for removal of barriers to the disabled 

and the elderly.

• Any disabled access credit, enhanced oil recovery 

credit, and credit for employer-provided childcare facilities and services.

• Any special depreciation allowance.

• Basis adjustment for investment credit property under 

section 50(c) of the Internal Revenue Code.

• Basis adjustment for advanced manufacturing investment credit property. See section 48D(d)(5) of the Internal Revenue Code.

For additional credits and deductions that affect basis, 

see section 1016 of the Internal Revenue Code.

Enter the basis for depreciation under column (c) in 

Part III of Form 4562. For information about how to determine the cost or other basis of property, see What Is the 

Basis of Your Depreciable Property? in chapter 1.

Which Recovery Period 

Applies?

Terms you may need to know 

(see Glossary):

Active conduct of a trade or business

Basis

Improvement

Listed property

Nonresidential real property

Placed in service

Property class

Recovery period

Residential rental property

Section 1245 property

The recovery period of property is the number of years 

over which you recover its cost or other basis. It is determined based on the depreciation system (GDS or ADS) 

used.

Recovery Periods Under GDS

Under GDS, property is depreciated over one of the following recovery periods.

Property Class Recovery Period

3-year property ............... 3 years1

5-year property ............... 5 years

7-year property ............... 7 years

10-year property .............. 10 years

15-year property .............. 15 years2

20-year property .............. 20 years

25-year property .............. 25 years3

Residential rental property ...... 27.5 

years

Nonresidential real property ..... 39 years4

1

 5 years for qualified rent-to-own property placed in service 

before August 6, 1997.

2

 39 years for property that is a retail motor fuels outlet placed 

in service before August 20, 1996 (31.5 years if placed in 

service before May 13, 1993), unless you elected to 

depreciate it over 15 years.

3

 20 years for property placed in service before June 13, 1996, 

or under a binding contract in effect before June 10, 1996.

4

 31.5 years for property placed in service before May 13, 

1993 (or before January 1, 1994, if the purchase or 

construction of the property is under a binding contract in 

effect before May 13, 1993, or if construction began before 

May 13, 1993).

The GDS recovery periods for property not listed above 

can be found in Appendix B, Table of Class Lives and Recovery Periods. Residential rental property and nonresidential real property are defined earlier under Which Property Class Applies Under GDS.

Enter the appropriate recovery period on Form 4562 

under column (d) in Section B of Part III, unless already 

shown (for 25-year property, residential rental property, 

and nonresidential real property).

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 31
Office in the home. If your home is a personal-use single family residence and you begin to use part of your 

home as an office, depreciate that part of your home as 

nonresidential real property over 39 years (31.5 years if 

you began using it for business before May 13, 1993). 

However, if your home is an apartment in an apartment 

building that you own and the building is residential rental 

property, as defined earlier under Which Property Class 

Applies Under GDS, depreciate the part used as an office 

as residential rental property over 27.5 years. See Pub. 

587 for a discussion of the tests you must meet to claim 

expenses, including depreciation, for the business use of 

your home.

Home changed to rental use. If you begin to rent a 

home that was your personal home before 1987, you depreciate it as residential rental property over 27.5 years.

Recovery Periods Under ADS

The recovery periods for most property are generally longer under ADS than they are under GDS. The following table shows some of the ADS recovery periods.

Property

Recovery

Period

Rent-to-own property ................  4 years

Automobiles and light duty trucks .......  5 years

Computers and peripheral equipment ....  5 years

High technology telephone station 

equipment installed on customer 

premises ........................  5 years

High technology medical equipment .....  5 years

Personal property with no class life ...... 12 years

Natural gas gathering lines ............ 14 years

Single-purpose agricultural and 

horticultural structures .............. 15 years

Any tree or vine bearing fruits or nuts .... 20 years

Initial clearing and grading land 

improvements for gas utility property ... 20 years

Initial clearing and grading land 

improvements for electric utility 

transmission and distribution plants ... 25 years

Electric transmission property used in the 

transmission at 69 or more kilovolts of 

electricity ........................ 30 years

Natural gas distribution lines ........... 35 years 

Nonresidential real property ........... 40 years

Residential rental property ............ 30 years1

Section 1245 real property not listed in 

Appendix B ...................... 40 years

Railroad grading and tunnel bore ....... 50 years

1

 40 years for property placed in service before January 1, 

2018. Note. The ADS recovery period for residential rental 

property placed in service before January 1, 2018, is 30 years 

if the property is held by an electing real property trade or 

business (as defined in section 163(j)(7)(B)) and section 

168(g)(1)(A), (B), (C), (D), or (E) did not apply to the property 

before January 1, 2018.

The ADS recovery periods for property not listed above 

can be found in the tables in Appendix B. Rent-to-own 

property, residential rental property, and nonresidential 

real property are defined earlier under Which Property 

Class Applies Under GDS.

Tax-exempt use property subject to a lease. The ADS 

recovery period for any property leased under a lease 

agreement to a tax-exempt organization, governmental 

unit, or foreign person or entity (other than a partnership) 

cannot be less than 125% of the lease term.

Additions and Improvements

An addition or improvement you make to depreciable 

property is treated as separate depreciable property. See 

How Do You Treat Repairs and Improvements? in chapter 1 for a definition of improvements. Its property class 

and recovery period are the same as those that would apply to the original property if you had placed it in service at 

the same time you placed the addition or improvement in 

service. The recovery period begins on the later of the following dates.

• The date you place the addition or improvement in 

service.

• The date you place in service the property to which 

you made the addition or improvement.

Example. You own a rental home that you have been 

renting out since 1981. If you put an addition on the home 

and place the addition in service this year, you would use 

MACRS to figure your depreciation deduction for the addition. Under GDS, the property class for the addition is residential rental property and its recovery period is 27.5 

years because the home to which the addition is made 

would be residential rental property if you had placed it in 

service this year.

Which Convention Applies?

Terms you may need to know 

(see Glossary):

Basis

Convention

Disposition

Nonresidential real property

Placed in service

32 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
Recovery period

Residential rental property

Under MACRS, averaging conventions establish when the 

recovery period begins and ends. The convention you use 

determines the number of months for which you can claim 

depreciation in the year you place property in service and 

in the year you dispose of the property.

The mid-month convention. Use this convention for 

nonresidential real property, residential rental property, 

and any railroad grading or tunnel bore.

Under this convention, you treat all property placed in 

service or disposed of during a month as placed in service 

or disposed of at the midpoint of the month. This means 

that a one-half month of depreciation is allowed for the 

month the property is placed in service or disposed of.

Your use of the mid-month convention is indicated by 

the “MM” already shown under column (e) in Part III of 

Form 4562.

The mid-quarter convention. Use this convention if the 

mid-month convention does not apply and the total depreciable bases of MACRS property you placed in service 

during the last 3 months of the tax year (excluding nonresidential real property, residential rental property, any railroad grading or tunnel bore, property placed in service 

and disposed of in the same year, and property that is being depreciated under a method other than MACRS) are 

more than 40% of the total depreciable bases of all 

MACRS property you placed in service during the entire 

year.

Under this convention, you treat all property placed in 

service or disposed of during any quarter of the tax year 

as placed in service or disposed of at the midpoint of that 

quarter. This means that, for a 12-month tax year, 11/2 

months of depreciation is allowed for the quarter the property is placed in service or disposed of.

If you use this convention, enter “MQ” under column (e) 

in Part III of Form 4562.

For purposes of determining whether the 

mid-quarter convention applies, the depreciable 

basis of property you placed in service during the 

tax year reflects the reduction in basis for amounts expensed under section 179 and the part of the basis of 

property attributable to personal use. However, it does not 

reflect any reduction in basis for any special depreciation 

allowance.

The half-year convention. Use this convention if neither 

the mid-quarter convention nor the mid-month convention 

applies.

Under this convention, you treat all property placed in 

service or disposed of during a tax year as placed in service or disposed of at the midpoint of the year. This means 

that for a 12-month tax year, a one-half year of depreciation is allowed for the year the property is placed in service or disposed of.

CAUTION

!

If you use this convention, enter “HY” under column (e) 

in Part III of Form 4562.

See Figuring the Deduction for a Short Tax Year, later, 

for information on the short tax year rules.

Which Depreciation Method 

Applies?

Terms you may need to know 

(see Glossary):

Declining balance method

Listed property

Nonresidential real property

Placed in service

Property class

Recovery period

Residential rental property

Straight line method

Tax exempt

MACRS provides three depreciation methods under GDS 

and one depreciation method under ADS.

• The 200% declining balance method over a GDS recovery period.

• The 150% declining balance method over a GDS recovery period.

• The straight line method over a GDS recovery period.

• The straight line method over an ADS recovery period.

For property placed in service before 1999, you 

could have elected the 150% declining balance 

method using the ADS recovery periods for certain property classes. If you made this election, continue 

to use the same method and recovery period for that property.

Table 4-1 lists the types of property you can depreciate 

under each method. It also gives a brief explanation of the 

method, including any benefits that may apply.

Depreciation Methods for Farm 

Property

If you place personal property in service in a farming business after 1988, and before 2018, you must generally depreciate it under GDS using the 150% declining balance 

method unless you are a farmer who must depreciate the 

property under ADS using the straight line method or you 

elect to depreciate the property under GDS or ADS using 

the straight line method. You can depreciate real property 

using the straight line method under either GDS or ADS.

CAUTION

!

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 33
Note. For 3-, 5-, 7-, or 10-year property used in a farming business and placed in service after 2017, in tax years 

ending after 2017, the 150% declining balance method is 

no longer required. However, the 150% declining balance 

method will continue to apply to any 15- or 20-year property used in a farming business to which the straight line 

method does not apply or to property for which you elect 

the use of the 150% declining balance method.

Fruit or nut trees and vines. Depreciate trees and vines 

bearing fruits or nuts under GDS using the straight line 

method over a recovery period of 10 years.

ADS required for some farmers. If you elect not to apply the uniform capitalization rules to any plant produced 

in your farming business, you must use ADS. You must 

use ADS for all property you place in service in any year 

the election is in effect. See the regulations under section 

263A of the Internal Revenue Code for information on the 

uniform capitalization rules that apply to farm property.

Electing a Different Method

As shown in Table 4-1, you can elect a different method 

for depreciation for certain types of property. You must 

make the election by the due date of the return (including 

extensions) for the year you placed the property in service. However, if you timely filed your return for the year 

without making the election, you can still make the election by filing an amended return within 6 months of the due 

date of the return (excluding extensions). Attach the election to the amended return and write “Filed pursuant to 

section 301.9100-2” on the election statement. File the 

amended return at the same address you filed the original 

return. Once you make the election, you cannot change it.

If you elect to use a different method for one item 

in a property class, you must apply the same 

method to all property in that class placed in service during the year of the election. However, you can make 

the election on a property-by-property basis for nonresidential real and residential rental property.

150% election. Instead of using the 200% declining balance method over the GDS recovery period for property in 

the 3-, 5-, 7-, or 10-year property class, you can elect to 

use the 150% declining balance method. Make the election by entering “150 DB” under column (f) in Part III of 

Form 4562.

Straight line election. Instead of using either the 200% 

or 150% declining balance method over the GDS recovery 

period, you can elect to use the straight line method over 

the GDS recovery period. Make the election by entering 

“S/L” under column (f) in Part III of Form 4562.

Election of ADS. As explained earlier under Which Depreciation System (GDS or ADS) Applies, you can elect to 

use ADS even though your property may come under 

GDS. ADS uses the straight line method of depreciation 

over fixed ADS recovery periods. Most ADS recovery periCAUTION

!

ods are listed in Appendix B, or see the table under Recovery Periods Under ADS, earlier.

Make the election by completing line 20 in Part III of 

Form 4562.

15- or 20-year farm property. Instead of using the 150% 

declining balance method over a GDS recovery period for 

15- or 20-year property you use in a farming business 

(other than real property), you can elect to depreciate it 

using either of the following methods.

• The straight line method over a GDS recovery period.

• The straight line method over an ADS recovery period.

How Is the Depreciation 

Deduction Figured?

Terms you may need to know 

(see Glossary):

Adjusted basis

Amortization

Basis

Business/investment use

Convention

Declining balance method

Disposition

Exchange

Nonresidential real property

Placed in service

Property class

Recovery period

Straight line method

Unadjusted basis

To figure your depreciation deduction under MACRS, you 

first determine the depreciation system, property class, 

placed in service date, basis amount, recovery period, 

convention, and depreciation method that apply to your 

property. Then, you are ready to figure your depreciation 

deduction. You can figure it using a percentage table provided by the IRS, or you can figure it yourself without using 

the table.

Using the MACRS Percentage Tables

To help you figure your deduction under MACRS, the IRS 

has established percentage tables that incorporate the 

applicable convention and depreciation method. These 

percentage tables are in Appendix A near the end of this 

publication.

34 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
Which table to use. Appendix A contains the MACRS 

Percentage Table Guide, which is designed to help you locate the correct percentage table to use for depreciating 

your property. The percentage tables immediately follow 

the guide.

Rules Covering the Use of the Tables

The following rules cover the use of the percentage tables.

1. You must apply the rates in the percentage tables to 

your property's unadjusted basis.

2. You cannot use the percentage tables for a short tax 

year. See Figuring the Deduction for a Short Tax Year, 

later, for information on the short tax year rules.

3. Once you start using the percentage tables for any 

item of property, you must generally continue to use 

them for the entire recovery period of the property.

Table 4-1. Depreciation Methods

Note. The declining balance method is abbreviated as DB and the straight line method is abbreviated as SL.

Method Type of Property Benefit

GDS using 200% 

DB

• Nonfarm 3-, 5-, 7-, and 10-year property

• Farm 3-, 5-, 7-, and 10-year property placed in 

service after 2017, in tax years ending after 2017

• Provides a greater deduction during the 

earlier recovery years

• Changes to SL when that method provides 

an equal or greater deduction 

GDS using 150% 

DB

• Farm 3-, 5-, 7-, or 10-year property placed in 

service before 2018

• All 15- and 20-year property 

• Nonfarm 3-, 5-, 7-, or 10-year property2

• Farm 3-, 5-, 7-, or 10-year property placed in 

service after 20172

• Provides a greater deduction during the 

earlier recovery years

• Changes to SL when that method provides 

an equal or greater deduction1

GDS using SL • Nonresidential real property

• Residential rental property

• Trees or vines bearing fruits or nuts

• Water utility property

• All 3-, 5-, 7-, 10-, 15-, and 20-year property2

• Property for which you elected section 168(k)

(4) of the Internal Revenue Code for a tax year 

beginning before January 1, 2018

• Qualified improvement property (as defined in 

section 168(e)(6) of the Internal Revenue Code) 

placed in service after 2017

• Provides for equal yearly deductions 

(except for the first and last years)

ADS using SL • Listed property used 50% or less for business

• Property used predominantly outside the 

United States

• Tax-exempt property

• Tax-exempt bond-financed property

• Farm property used when an election not to 

apply the uniform capitalization rules is in effect

• Imported property3

• Any property for which you elect to use this

method4

• Any nonresidential real property, residential 

rental property, or qualfied improvement property 

held by an electing real property trade or 

business (as defined in section 163(j)(7)(B) of 

the Internal Revenue Code)

• Any property that has a recovery period of 10 

years or more under GDS that is held by an 

electing farming business (as defined in section 

163(j)(7)(C) of the Internal Revenue Code)

• Provides for equal yearly deductions 

(except for the first and last years)

1

 The MACRS percentage tables in Appendix A have the switch to the straight line method built into their rates.

2

 See section 168(b)(5) of the Internal Revenue Code.

3

 See section 168(g)(6) of the Internal Revenue Code.

4

 See section 168(g)(7) of the Internal Revenue Code.

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 35
4. You must stop using the tables if you adjust the basis 

of the property for any reason other than:

a. Depreciation allowed or allowable, or

b. An addition or improvement to that property that is 

depreciated as a separate item of property.

Basis adjustments other than those made due to the items 

listed in (4) include an increase in basis for the recapture 

of a clean-fuel deduction or credit and a reduction in basis 

for a casualty loss.

Basis adjustment due to recapture of clean-fuel vehicle deduction or credit. If you increase the basis of your 

property because of the recapture of part or all of a deduction for clean-fuel vehicles or the credit for clean-fuel vehicle refueling property placed in service before January 1, 

2006, you cannot continue to use the percentage tables. 

For the year of the adjustment and the remaining recovery 

period, you must figure the depreciation deduction yourself using the property's adjusted basis at the end of the 

year. See Figuring the Deduction Without Using the Tables, later.

Basis adjustment due to casualty loss. If you reduce 

the basis of your property because of a casualty, you cannot continue to use the percentage tables. For the year of 

the adjustment and the remaining recovery period, you 

must figure the depreciation yourself using the property's 

adjusted basis at the end of the year. See Figuring the Deduction Without Using the Tables, later.

Example. On October 26, 2022, Sandra and Frank 

Elm, calendar year taxpayers, bought and placed in service in their business a new item of 7-year property. It cost 

$39,000 and they elected a section 179 deduction of 

$24,000. They also made an election under section 168(k)

(7) not to deduct the special depreciation allowance for 

7-year property placed in service in 2022. Their unadjusted basis after the section 179 deduction was $15,000 

($39,000 – $24,000). They figured their MACRS depreciation deduction using the percentage tables. For 2022, their 

MACRS depreciation deduction was $536.

In July 2023, the property was vandalized and they had 

a deductible casualty loss of $3,000. Sandra and Frank 

must adjust the property's basis for the casualty loss, so 

they can no longer use the percentage tables. Their adjusted basis at the end of 2023, before figuring their 2023 depreciation, is $11,464. They figure that amount by subtracting the 2022 MACRS depreciation of $536 and the 

casualty loss of $3,000 from the unadjusted basis of 

$15,000. They must now figure their depreciation for 2023 

without using the percentage tables.

Figuring the Unadjusted Basis of Your 

Property

You must apply the table rates to your property's unadjusted basis each year of the recovery period. Unadjusted 

basis is the same basis amount you would use to figure 

gain on a sale, but you figure it without reducing your original basis by any MACRS depreciation taken in earlier 

years. However, you do reduce your original basis by other 

amounts, including the following.

• Any amortization taken on the property.

• Any section 179 deduction claimed.

• Any special depreciation allowance taken on the property.

For business property you purchase during the year, 

the unadjusted basis is its cost minus these and other applicable adjustments. If you trade property, your unadjusted basis in the property received is the cash paid plus the 

adjusted basis of the property traded minus these adjustments.

MACRS Worksheet

You can use this worksheet to help you figure your depreciation deduction using the percentage tables. Use a separate worksheet for each item of property. Then, use the 

information from this worksheet to prepare Form 4562.

Do not use this worksheet for automobiles. Use 

the Depreciation Worksheet for Passenger Automobiles in chapter 5.

MACRS Worksheet 

Keep for Your Records

Part I 

1. MACRS system (GDS or 

ADS) ...........................

2. Property class ..................

3. Date placed in service ...........

4. Recovery period ................

5. Method and convention ..........

6. Depreciation rate (from 

tables) .........................

Part II 

7. Cost or other basis* ............. $

8. Business/investment use ........ %

9. Multiply line 7 by line 8 .................. $

10. Total claimed for section 179 deduction 

and other items ........................ $

11. Subtract line 10 from line 9. This is your 

tentative basis for depreciation .......... $

12. Multiply line 11 by the applicable 

percentage if the special depreciation 

allowance applies. This is your special 

depreciation allowance. Enter -0- if this is 

not the year you placed the property in 

service, the property is not qualified 

property, or you elected not to claim a 

special allowance ...................... $

13. Subtract line 12 from line 11. This is your 

basis for depreciation ...................

CAUTION

!

36 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
14. Depreciation rate (from line 6) ...........

15. Multiply line 13 by line 14. This is your 

MACRS depreciation deduction ......... $

* If real estate, do not include cost (basis) of land.

The following example shows how to figure your 

MACRS depreciation deduction using the percentage tables and the MACRS Worksheet.

Example. You bought office furniture (7-year property) 

for $10,000 and placed it in service on August 11, 2023. 

You use the furniture only for business. This is the only 

property you placed in service this year. You did not elect 

a section 179 deduction and the property is not qualified 

property for purposes of claiming a special depreciation 

allowance, so your property's unadjusted basis is its cost, 

$10,000. You use GDS and the half-year convention to figure your depreciation. You refer to the MACRS Percentage 

Table Guide in Appendix A and find that you should use 

Table A-1. Multiply your property's unadjusted basis each 

year by the percentage for 7-year property given in Table 

A-1. You figure your depreciation deduction using the 

MACRS Worksheet as follows.

MACRS Worksheet Keep for Your Records

Part I 

1. MACRS system (GDS or ADS) ................................... GDS

2. Property class .................................................. 7-year

3. Date placed in service ........................................... 8/11/23

4. Recovery period ................................................ 7-year

5. Method and convention .......................................... 200%DB/Half-Year

6. Depreciation rate (from tables) ................................... 0.1429

Part II 

7. Cost or other basis* ............................................. $10,000

8. Business/investment use ........................................ 100 %

9. Multiply line 7 by line 8 .......................................................... $10,000

10. Total claimed for section 179 deduction and other items ........................... -0-

11. Subtract line 10 from line 9. This is your tentative basis for depreciation ............. $10,000

12. Multiply line 11 by the applicable percentage if the special depreciation allowance 

applies. This is your special depreciation allowance. Enter -0- if this is not the year you 

placed the property in service, the property is not qualified property, or you elected not 

to claim a special allowance .....................................................

-0-

13. Subtract line 12 from line 11. This is your basis for depreciation .................... $10,000

14. Depreciation rate (from line 6) ................................................... 0.1429

15. Multiply line 13 by line 14. This is your MACRS depreciation deduction .............. $1,429

* If real estate, do not include cost (basis) of land.

If there are no adjustments to the basis of the property 

other than depreciation, your depreciation deduction for 

each subsequent year of the recovery period will be as follows.

Year Basis Percentage Deduction

2024 .......... $10,000 24.49% $2,449

2025 .......... 10,000 17.49 1,749

2026 .......... 10,000 12.49 1,249

2027 .......... 10,000 8.93 893

2028 .......... 10,000 8.92 892

2029 .......... 10,000 8.93 893

2030 .......... 10,000 4.46 446

Examples

The following examples are provided to show you how to 

use the percentage tables. In both examples, assume the 

following.

• You use the property only for business.

• You use the calendar year as your tax year.

• You use GDS for all the properties.

Example 1. You bought a building and land for 

$120,000 and placed it in service on March 8. The sales 

contract showed that the building cost $100,000 and the 

land cost $20,000. It is nonresidential real property. The 

building's unadjusted basis is its original cost, $100,000.

You refer to the MACRS Percentage Table Guide in Appendix A and find that you should use Table A-7a. March 

is the third month of your tax year, so multiply the 

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 37
building's unadjusted basis, $100,000, by the percentages 

for the third month in Table A-7a. Your depreciation deduction for each of the first 3 years is as follows.

Year Basis Percentage Deduction

1st ............ $100,000 2.033% $2,033

2nd ........... 100,000 2.564 2,564

3rd ........... 100,000 2.564 2,564

Example 2. During the year, you bought a machine 

(7-year property) for $4,000, office furniture (7-year property) for $1,000, and a computer (5-year property) for 

$5,000. You placed the machine in service in January, the 

furniture in September, and the computer in October. You 

do not elect a section 179 deduction and none of these 

items is qualified property for purposes of claiming a special depreciation allowance.

You placed property in service during the last 3 months 

of the year, so you must first determine if you have to use 

the mid-quarter convention. The total bases of all property 

you placed in service during the year is $10,000. The 

$5,000 basis of the computer, which you placed in service 

during the last 3 months (the fourth quarter) of your tax 

year, is more than 40% of the total bases of all property 

($10,000) you placed in service during the year. Therefore, you must use the mid-quarter convention for all three 

items.

You refer to the MACRS Percentage Table Guide in Appendix A to determine which table you should use under 

the mid-quarter convention. The machine is 7-year property placed in service in the first quarter, so you use Table 

A-2 . The furniture is 7-year property placed in service in 

the third quarter, so you use Table A-4. Finally, because 

the computer is 5-year property placed in service in the 

fourth quarter, you use Table A-5. Knowing what table to 

use for each property, you figure the depreciation for the 

first 2 years as follows.

Year Property Basis Percentage Deduction

1st Machine $4,000 25.00 $1,000

2nd Machine  4,000 21.43 857

1st Furniture  1,000 10.71 107

2nd Furniture  1,000 25.51 255

1st Computer  5,000 5.00 250

2nd Computer  5,000 38.00 1,900

Sale or Other Disposition Before the 

Recovery Period Ends

If you sell or otherwise dispose of your property before the 

end of its recovery period, your depreciation deduction for 

the year of the disposition will be only part of the depreciation amount for the full year. You have disposed of your 

property if you have permanently withdrawn it from use in 

your business or income-producing activity because of its 

sale, exchange, retirement, abandonment, involuntary 

conversion, or destruction. After you figure the full-year 

depreciation amount, figure the deductible part using the 

convention that applies to the property.

Half-year convention used. For property for which you 

used a half-year convention, the depreciation deduction 

for the year of the disposition is half the depreciation determined for the full year.

Mid-quarter convention used. For property for which 

you used the mid-quarter convention, figure your depreciation deduction for the year of the disposition by multiplying a full year of depreciation by the percentage listed below for the quarter in which you disposed of the property.

Quarter Percentage

First ............................... 12.5%

Second ............................ 37.5

Third .............................. 62.5

Fourth ............................. 87.5

Example. On December 2, 2020, you placed in service an item of 5-year property costing $10,000. You did not 

claim a section 179 deduction and the property does not 

qualify for a special depreciation allowance. Your unadjusted basis for the property was $10,000. You used the 

mid-quarter convention because this was the only item of 

business property you placed in service in 2020 and it was 

placed in service during the last 3 months of your tax year. 

Your property is in the 5-year property class, so you used 

Table A-5 to figure your depreciation deduction. Your deductions for 2020, 2021, and 2022 were $500 (5% of 

$10,000), $3,800 (38% of $10,000), and $2,280 (22.80% 

of $10,000), respectively. You disposed of the property on 

April 6, 2023. To determine your depreciation deduction 

for 2023, first figure the deduction for the full year. This is 

$1,368 (13.68% of $10,000). April is in the second quarter 

of the year, so you multiply $1,368 by 37.5% (0.375) to get 

your depreciation deduction of $513 for 2023.

Mid-month convention used. If you dispose of residential rental or nonresidential real property, figure your depreciation deduction for the year of the disposition by multiplying a full year of depreciation by a fraction. The 

numerator of the fraction is the number of months (including partial months) in the year that the property is considered in service. The denominator is 12.

Example. On July 2, 2021, you purchased and placed 

in service residential rental property. The property cost 

$100,000, not including the cost of land. You used Table 

A-6 to figure your MACRS depreciation for this property. 

You sold the property on March 2, 2023. You file your tax 

return based on the calendar year.

A full year of depreciation for 2023 is $3,636. This is 

$100,000 multiplied by 0.03636 (the percentage for the 

seventh month of the third recovery year) from Table A-6. 

You then apply the mid-month convention for the 21/2 

months of use in 2023. Treat the month of disposition as 

one-half month of use. Multiply $3,636 by the fraction, 2.5 

38 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
over 12, to get your 2023 depreciation deduction of 

$757.50.

Figuring the Deduction Without Using 

the Tables

Instead of using the rates in the percentage tables to figure your depreciation deduction, you can figure it yourself. 

Before making the computation each year, you must reduce your adjusted basis in the property by the depreciation claimed the previous year(s).

Figuring MACRS deductions without using the tables will generally result in a slightly different 

amount than using the tables.

Declining Balance Method

When using a declining balance method, you apply the 

same depreciation rate each year to the adjusted basis of 

your property. You must use the applicable convention for 

the first tax year and you must switch to the straight line 

method beginning in the first year for which it will give an 

equal or greater deduction. The straight line method is explained later.

You figure depreciation for the year you place property 

in service as follows.

1. Multiply your adjusted basis in the property by the declining balance rate.

2. Apply the applicable convention.

You figure depreciation for all other years (before the 

year you switch to the straight line method) as follows.

1. Reduce your adjusted basis in the property by the depreciation allowed or allowable in earlier years.

2. Multiply this new adjusted basis by the same declining balance rate used in earlier years.

If you dispose of property before the end of its recovery 

period, see Using the Applicable Convention, later, for information on how to figure depreciation for the year you 

dispose of it.

Figuring depreciation under the declining balance 

method and switching to the straight line method is illustrated in Example 1, later, under Examples.

Declining balance rate. You figure your declining balance rate by dividing the specified declining balance percentage (150% or 200% changed to a decimal) by the 

number of years in the property's recovery period. For example, for 3-year property depreciated using the 200% 

declining balance method, divide 2.00 (200%) by 3 to get 

0.6667, or a 66.67% declining balance rate. For 15-year 

property depreciated using the 150% declining balance 

method, divide 1.50 (150%) by 15 to get 0.10, or a 10% 

declining balance rate.

CAUTION

!

The following table shows the declining balance rate for 

each property class and the first year for which the straight 

line method gives an equal or greater deduction.

Property 

Class Method

Declining Balance 

Rate Year

3-year 200% DB 66.667% 3rd

5-year 200% DB 40.0 4th

7-year 200% DB 28.571 5th

10-year 200% DB 20.0 7th

15-year 150% DB 10.0 7th

20-year 150% DB 7.5 9th

Straight Line Method

When using the straight line method, you apply a different 

depreciation rate each year to the adjusted basis of your 

property. You must use the applicable convention in the 

year you place the property in service and the year you 

dispose of the property.

You figure depreciation for the year you place property 

in service as follows.

1. Multiply your adjusted basis in the property by the 

straight line rate.

2. Apply the applicable convention.

You figure depreciation for all other years (including the 

year you switch from the declining balance method to the 

straight line method) as follows.

1. Reduce your adjusted basis in the property by the depreciation allowed or allowable in earlier years (under 

any method).

2. Determine the depreciation rate for the year.

3. Multiply the adjusted basis figured in (1) by the depreciation rate figured in (2).

If you dispose of property before the end of its recovery 

period, see Using the Applicable Convention, later, for information on how to figure depreciation for the year you 

dispose of it.

Straight line rate. You determine the straight line depreciation rate for any tax year by dividing the number 1 by 

the years remaining in the recovery period at the beginning of that year. When figuring the number of years remaining, you must take into account the convention used 

in the year you placed the property in service. If the number of years remaining is less than 1, the depreciation rate 

for that tax year is 1.0 (100%).

Using the Applicable Convention

The applicable convention (discussed earlier under Which 

Convention Applies) affects how you figure your depreciation deduction for the year you place your property in service and for the year you dispose of it. It determines how 

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 39
much of the recovery period remains at the beginning of 

each year, so it also affects the depreciation rate for property you depreciate under the straight line method. See 

Straight line rate in the previous discussion. Use the applicable convention, as explained in the following discussions.

Half-year convention. If this convention applies, you deduct a half-year of depreciation for the first year and the 

last year that you depreciate the property. You deduct a 

full year of depreciation for any other year during the recovery period.

Figure your depreciation deduction for the year you 

place the property in service by dividing the depreciation 

for a full year by 2. If you dispose of the property before 

the end of the recovery period, figure your depreciation 

deduction for the year of the disposition the same way. If 

you hold the property for the entire recovery period, your 

depreciation deduction for the year that includes the final 

6 months of the recovery period is the amount of your unrecovered basis in the property.

Mid-quarter convention. If this convention applies, the 

depreciation you can deduct for the first year you depreciate the property depends on the quarter in which you 

place the property in service.

A quarter of a full 12-month tax year is a period of 3 

months. The first quarter in a year begins on the first day 

of the tax year. The second quarter begins on the first day 

of the fourth month of the tax year. The third quarter begins on the first day of the seventh month of the tax year. 

The fourth quarter begins on the first day of the tenth 

month of the tax year. A calendar year is divided into the 

following quarters.

Quarter Months

First .............. January, February, March

Second ............ April, May, June

Third .............. July, August, September

Fourth ............. October, November, December

Figure your depreciation deduction for the year you 

place the property in service by multiplying the depreciation for a full year by the percentage listed below for the 

quarter you place the property in service.

Quarter Percentage

First .............................. 87.5%

Second ........................... 62.5

Third ............................. 37.5

Fourth ............................ 12.5

If you dispose of the property before the end of the recovery period, figure your depreciation deduction for the 

year of the disposition by multiplying a full year of depreciation by the percentage listed below for the quarter you 

dispose of the property.

Quarter Percentage

First .............................. 12.5%

Second ............................ 37.5

Third .............................. 62.5

Fourth ............................. 87.5

If you hold the property for the entire recovery period, 

your depreciation deduction for the year that includes the 

final quarter of the recovery period is the amount of your 

unrecovered basis in the property.

Mid-month convention. If this convention applies, the 

depreciation you can deduct for the first year that you depreciate the property depends on the month in which you 

place the property in service. Figure your depreciation deduction for the year you place the property in service by 

multiplying the depreciation for a full year by a fraction. 

The numerator of the fraction is the number of full months 

in the year that the property is in service plus 1/2 (or 0.5). 

The denominator is 12.

If you dispose of the property before the end of the recovery period, figure your depreciation deduction for the 

year of the disposition the same way. If you hold the property for the entire recovery period, your depreciation deduction for the year that includes the final month of the recovery period is the amount of your unrecovered basis in 

the property.

Example. You use the calendar year and place nonresidential real property in service in August. The property 

is in service 4 full months (September, October, November, and December). Your numerator is 4.5 (4 full months 

plus 0.5). You multiply the depreciation for a full year by 

4.5/12, or 0.375.

Examples

The following examples show how to figure depreciation 

under MACRS without using the percentage tables. Figures are rounded for purposes of the examples. Assume 

for all the examples that you use a calendar year as your 

tax year.

Example 1—200% DB method and half-year convention. In February, you placed in service depreciable 

property with a 5-year recovery period and a basis of 

$1,000. You do not elect to take the section 179 deduction 

and the property does not qualify for a special depreciation allowance. You use GDS and the 200% DB method to 

figure your depreciation. When the SL method results in 

an equal or larger deduction, you switch to the SL method. 

You did not place any property in service in the last 3 

months of the year, so you must use the half-year convention.

First year. You figure the depreciation rate under the 

200% DB method by dividing 2 (200%) by 5 (the number 

of years in the recovery period). The result is 40%. You 

multiply the adjusted basis of the property ($1,000) by the 

40% DB rate. You apply the half-year convention by dividing the result ($400) by 2. Depreciation for the first year 

under the 200% DB method is $200.

40 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
You figure the depreciation rate under the SL method 

by dividing 1 by 5, the number of years in the recovery period. The result is 20%.You multiply the adjusted basis of 

the property ($1,000) by the 20% SL rate. You apply the 

half-year convention by dividing the result ($200) by 2. Depreciation for the first year under the SL method is $100.

The DB method provides a larger deduction, so you deduct the $200 figured under the 200% DB method.

Second year. You reduce the adjusted basis ($1,000) 

by the depreciation claimed in the first year ($200). You 

multiply the result ($800) by the DB rate (40%). Depreciation for the second year under the 200% DB method is 

$320.

You figure the SL depreciation rate by dividing 1 by 4.5, 

the number of years remaining in the recovery period. 

(Based on the half-year convention, you used only half a 

year of the recovery period in the first year.) You multiply 

the reduced adjusted basis ($800) by the result (22.22%). 

Depreciation under the SL method for the second year is 

$178.

The DB method provides a larger deduction, so you deduct the $320 figured under the 200% DB method.

Third year. You reduce the adjusted basis ($800) by 

the depreciation claimed in the second year ($320). You 

multiply the result ($480) by the DB rate (40%). Depreciation for the third year under the 200% DB method is $192.

You figure the SL depreciation rate by dividing 1 by 3.5. 

You multiply the reduced adjusted basis ($480) by the result (28.57%). Depreciation under the SL method for the 

third year is $137.

The DB method provides a larger deduction, so you deduct the $192 figured under the 200% DB method.

Fourth year. You reduce the adjusted basis ($480) by 

the depreciation claimed in the third year ($192). You multiply the result ($288) by the DB rate (40%). Depreciation 

for the fourth year under the 200% DB method is $115.

You figure the SL depreciation rate by dividing 1 by 2.5. 

You multiply the reduced adjusted basis ($288) by the result (40%). Depreciation under the SL method for the 

fourth year is $115.

The SL method provides an equal deduction, so you 

switch to the SL method and deduct the $115.

Fifth year. You reduce the adjusted basis ($288) by the 

depreciation claimed in the fourth year ($115) to get the 

reduced adjusted basis of $173. You figure the SL depreciation rate by dividing 1 by 1.5. You multiply the reduced 

adjusted basis ($173) by the result (66.67%). Depreciation 

under the SL method for the fifth year is $115.

Sixth year. You reduce the adjusted basis ($173) by 

the depreciation claimed in the fifth year ($115) to get the 

reduced adjusted basis of $58. There is less than 1 year 

remaining in the recovery period, so the SL depreciation 

rate for the sixth year is 100%. You multiply the reduced 

adjusted basis ($58) by 100% to arrive at the depreciation 

deduction for the sixth year ($58).

Example 2—SL method and mid-month convention. In January, you bought and placed in service a 

building for $100,000 that is nonresidential real property 

with a recovery period of 39 years. The adjusted basis of 

the building is its cost of $100,000. You use GDS, the SL 

method, and the mid-month convention to figure your depreciation.

First year. You figure the SL depreciation rate for the 

building by dividing 1 by 39 years. The result is 0.02564. 

The depreciation for a full year is $2,564 ($100,000 × 

0.02564). Under the mid-month convention, you treat the 

property as placed in service in the middle of January. You 

get 11.5 months of depreciation for the year. Expressed 

as a decimal, the fraction of 11.5 months divided by 12 

months is 0.958. Your first-year depreciation for the building is $2,456 ($2,564 × 0.958).

Second year. You subtract $2,456 from $100,000 to 

get your adjusted basis of $97,544 for the second year. 

The SL rate is 0.02629. This is 1 divided by the remaining 

recovery period of 38.042 years (39 years reduced by 

11.5 months or 0.958). Your depreciation for the building 

for the second year is $2,564 ($97,544 × 0.02629).

Third year. The adjusted basis is $94,980 ($97,544 − 

$2,564). The SL rate is 0.027 (1 divided by 37.042 remaining years). Your depreciation for the third year is 

$2,564 ($94,980 × 0.027).

Example 3—200% DB method and mid-quarter 

convention. During the year, you bought and placed in 

service in your business the following items.

Item

Month Placed

in Service Cost

Safe January $4,000

Office furniture September 1,000

Computer October 5,000

You do not elect a section 179 deduction and these items 

do not qualify for a special depreciation allowance. You 

use GDS and the 200% DB method to figure the depreciation. The total bases of all property you placed in service 

this year is $10,000. The basis of the computer ($5,000) is 

more than 40% of the total bases of all property placed in 

service during the year ($10,000), so you must use the 

mid-quarter convention. This convention applies to all 

three items of property. The safe and office furniture are 

7-year property and the computer is 5-year property.

First- and second-year depreciation for safe. The 

200% DB rate for 7-year property is 0.28571. You determine this by dividing 2.00 (200%) by 7 years. The depreciation for the safe for a full year is $1,143 ($4,000 × 

0.28571). You placed the safe in service in the first quarter 

of your tax year, so you multiply $1,143 by 87.5% (the 

mid-quarter percentage for the first quarter). The result, 

$1,000, is your deduction for depreciation on the safe for 

the first year.

For the second year, the adjusted basis of the safe is 

$3,000. You figure this by subtracting the first year's depreciation ($1,000) from the basis of the safe ($4,000). 

Your depreciation deduction for the second year is $857

($3,000 × 0.28571).

First- and second-year depreciation for furniture. 

The furniture is also 7-year property, so you use the same 

200% DB rate of 0.28571. You multiply the basis of the 

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 41
furniture ($1,000) by 0.28571 to get the depreciation of 

$286 for the full year. You placed the furniture in service in 

the third quarter of your tax year, so you multiply $286 by 

37.5% (the mid-quarter percentage for the third quarter). 

The result, $107, is your deduction for depreciation on the 

furniture for the first year.

For the second year, the adjusted basis of the furniture 

is $893. You figure this by subtracting the first year's depreciation ($107) from the basis of the furniture ($1,000). 

Your depreciation for the second year is $255 ($893 × 

0.28571).

First- and second-year depreciation for computer. 

The 200% DB rate for 5-year property is 0.40. You determine this by dividing 2.00 (200%) by 5 years. The depreciation for the computer for a full year is $2,000 ($5,000 × 

0.40). You placed the computer in service in the fourth 

quarter of your tax year, so you multiply the $2,000 by 

12.5% (the mid-quarter percentage for the fourth quarter). 

The result, $250, is your deduction for depreciation on the 

computer for the first year.

For the second year, the adjusted basis of the computer is $4,750. You figure this by subtracting the first 

year's depreciation ($250) from the basis of the computer 

($5,000). Your depreciation deduction for the second year 

is $1,900 ($4,750 × 0.40).

Example 4—200% DB method and half-year convention. Last year, in July, you bought and placed in 

service in your business a new item of 7-year property. 

This was the only item of property you placed in service 

last year. The property cost $39,000 and you elected a 

$24,000 section 179 deduction. You also made an election under section 168(k)(7) not to deduct the special depreciation allowance for 7-year property placed in service 

last year. Your unadjusted basis for the property is 

$15,000. Because you did not place any property in service in the last 3 months of your tax year, you used the 

half-year convention. You figured your deduction using the 

percentages in Table A-1 for 7-year property. Last year, 

your depreciation was $2,144 ($15,000 × 14.29% 

(0.1429)).

In July of this year, your property was vandalized. You 

had a deductible casualty loss of $3,000. You spent 

$3,500 to put the property back in operational order. Your 

adjusted basis at the end of this year is $13,356. You figured this by first subtracting the first year's depreciation 

($2,144) and the casualty loss ($3,000) from the unadjusted basis of $15,000. To this amount ($9,856), you then 

added the $3,500 repair cost.

You cannot use the table percentages to figure your depreciation for this property for this year because of the adjustments to basis. You must figure the deduction yourself. 

You determine the DB rate by dividing 2.00 (200%) by 7 

years. The result is 0.28571 or 28.571%. You multiply the 

adjusted basis of your property ($13,356) by the DB rate 

of 0.28571 to get your depreciation deduction of $3,816 

for this year.

Figuring the Deduction for Property 

Acquired in a Nontaxable Exchange

If your property has a carryover basis because you acquired it in a nontaxable transfer such as a like-kind exchange or involuntary conversion, you must generally figure depreciation for the property as if the transfer had not 

occurred. However, see Like-kind exchanges and involuntary conversions, earlier, in chapter 3 under How Much 

Can You Deduct; and Property Acquired in a Like-kind Exchange or Involuntary Conversion next.

Property Acquired in a Like-kind Exchange 

or Involuntary Conversion

You must generally depreciate the carryover basis of property acquired in a like-kind exchange or involuntary conversion over the remaining recovery period of the property 

exchanged or involuntarily converted. You also generally 

continue to use the same depreciation method and convention used for the exchanged or involuntarily converted 

property. This applies only to acquired property with the 

same or a shorter recovery period and the same or more 

accelerated depreciation method than the property exchanged or involuntarily converted. The excess basis (the 

part of the acquired property's basis that exceeds its carryover basis), if any, of the acquired property is treated as 

newly placed in service property.

For acquired property that has a longer recovery period 

or less accelerated depreciation method than the exchanged or involuntarily converted property, you must 

generally depreciate the carryover basis of the acquired 

property as if it were placed in service in the same tax 

year as the exchanged or involuntarily converted property. 

You also generally continue to use the longer recovery period and less accelerated depreciation method of the acquired property.

If the MACRS property you acquired in the exchange or 

involuntary conversion is qualified property, discussed 

earlier in chapter 3 under What Is Qualified Property, you 

can claim a special depreciation allowance on the carryover basis. Special rules apply to vehicles acquired in a 

trade-in. For information on how to figure depreciation for 

a vehicle acquired in a trade-in that is subject to the passenger automobile limits, see Deductions For Passenger 

Automobiles Acquired in a Trade-in under Do the Passenger Automobile Limits Apply? in chapter 5.

Like-kind exchanges completed after December 

31, 2017, are generally limited to exchanges of 

real property not held primarily for sale.

Election out. Instead of using the above rules, you 

can elect, for depreciation purposes, to treat the adjusted 

basis of the exchanged or involuntarily converted property 

as if disposed of at the time of the exchange or involuntary 

conversion. Treat the carryover basis and excess basis, if 

any, for the acquired property as if placed in service the 

later of the date you acquired it or the time of the disposition of the exchanged or involuntarily converted property. 

CAUTION

!

42 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
The depreciable basis of the new property is the adjusted 

basis of the exchanged or involuntarily converted property 

plus any additional amount you paid for it. The election, if 

made, applies to both the acquired property and the exchanged or involuntarily converted property. This election 

does not affect the amount of gain or loss recognized on 

the exchange or involuntary conversion.

When to make the election. You must make the election on a timely filed return (including extensions) for the 

year of replacement. The election must be made separately by each person acquiring replacement property. In 

the case of a partnership, S corporation, or consolidated 

group, the election is made by the partnership, by the S 

corporation, or by the common parent of a consolidated 

group, respectively. Once made, the election may not be 

revoked without IRS consent.

For more information and special rules, see the Instructions for Form 4562.

Property Acquired in a Nontaxable Transfer

You must depreciate MACRS property acquired by a corporation or partnership in certain nontaxable transfers 

over the property's remaining recovery period in the transferor's hands, as if the transfer had not occurred. You must 

continue to use the same depreciation method and convention as the transferor. You can depreciate the part of 

the property's basis that exceeds its carryover basis (the 

transferor's adjusted basis in the property) as newly purchased MACRS property.

The nontaxable transfers covered by this rule include 

the following.

• A distribution in complete liquidation of a subsidiary.

• A transfer to a corporation controlled by the transferor.

• An exchange of property solely for corporate stock or 

securities in a reorganization.

• A contribution of property to a partnership in exchange 

for a partnership interest.

• A partnership distribution of property to a partner.

Figuring the Deduction for a Short Tax 

Year

You cannot use the MACRS percentage tables to determine depreciation for a short tax year. A short tax year is 

any tax year with less than 12 full months. This section 

discusses the rules for determining the depreciation deduction for property you place in service or dispose of in a 

short tax year. It also discusses the rules for determining 

depreciation when you have a short tax year during the recovery period (other than the year the property is placed 

in service or disposed of).

For more information on figuring depreciation for a 

short tax year, see Revenue Procedure 89-15, 1989-1 

C.B. 816.

Using the Applicable Convention in a Short 

Tax Year

The applicable convention establishes the date property is 

treated as placed in service and disposed of. Depreciation 

is allowable only for that part of the tax year the property is 

treated as in service. The recovery period begins on the 

placed in service date determined by applying the convention. The remaining recovery period at the beginning of 

the next tax year is the full recovery period less the part for 

which depreciation was allowable in the first tax year.

The following discussions explain how to use the applicable convention in a short tax year.

Mid-month convention. Under the mid-month convention, you always treat your property as placed in service or 

disposed of on the midpoint of the month it is placed in 

service or disposed of. You apply this rule without regard 

to your tax year.

Half-year convention. Under the half-year convention, 

you treat property as placed in service or disposed of on 

the midpoint of the tax year it is placed in service or disposed of.

First or last day of month. For a short tax year beginning on the first day of a month or ending on the last day of 

a month, the tax year consists of the number of months in 

the tax year. If the short tax year includes part of a month, 

you generally include the full month in the number of 

months in the tax year. You determine the midpoint of the 

tax year by dividing the number of months in the tax year 

by 2. For the half-year convention, you treat property as 

placed in service or disposed of on either the first day or 

the midpoint of a month.

For example, a short tax year that begins on June 20 

and ends on December 31 consists of 7 months. You use 

only full months for this determination, so you treat the tax 

year as beginning on June 1 instead of June 20. The midpoint of the tax year is the middle of September (31/2 

months from the beginning of the tax year). You treat property as placed in service or disposed of on this midpoint.

Example. Tara Corporation, a calendar year taxpayer, 

was incorporated on March 15. For purposes of the 

half-year convention, it has a short tax year of 10 months, 

ending on December 31, 2023. During the short tax year, 

Tara placed property in service for which it uses the 

half-year convention. Tara treats this property as placed in 

service on the first day of the sixth month of the short tax 

year, or August 1, 2023.

Not on first or last day of month. For a short tax 

year not beginning on the first day of a month and not ending on the last day of a month, the tax year consists of the 

number of days in the tax year. You determine the midpoint of the tax year by dividing the number of days in the 

tax year by 2. For the half-year convention, you treat property as placed in service or disposed of on either the first 

day or the midpoint of a month. If the result of dividing the 

number of days in the tax year by 2 is not the first day or 

the midpoint of a month, you treat the property as placed 

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 43
in service or disposed of on the nearest preceding first 

day or midpoint of a month.

Mid-quarter convention. To determine if you must use 

the mid-quarter convention, compare the basis of property 

you place in service in the last 3 months of your tax year to 

that of property you place in service during the full tax 

year. The length of your tax year does not matter. If you 

have a short tax year of 3 months or less, use the 

mid-quarter convention for all applicable property you 

place in service during that tax year.

You treat property under the mid-quarter convention as 

placed in service or disposed of on the midpoint of the 

quarter of the tax year in which it is placed in service or 

disposed of. Divide a short tax year into 4 quarters and 

determine the midpoint of each quarter.

For a short tax year of 4 or 8 full calendar months, determine quarters on the basis of whole months. The midpoint of each quarter is either the first day or the midpoint 

of a month. Treat property as placed in service or disposed of on this midpoint.

To determine the midpoint of a quarter for a short tax 

year of other than 4 or 8 full calendar months, complete 

the following steps.

1. Determine the number of days in your short tax year.

2. Determine the number of days in each quarter by dividing the number of days in your short tax year by 4.

3. Determine the midpoint of each quarter by dividing 

the number of days in each quarter by 2.

If the result of (3) gives you a midpoint of a quarter that 

is on a day other than the first day or midpoint of a month, 

treat the property as placed in service or disposed of on 

the nearest preceding first day or midpoint of that month.

Example. Tara Corporation, a calendar year taxpayer, 

was incorporated and began business on March 15. It has 

a short tax year of 91/2 months, ending on December 31. 

During December, it placed property in service for which it 

must use the mid-quarter convention. This is a short tax 

year of other than 4 or 8 full calendar months, so it must 

determine the midpoint of each quarter.

1. First, it determines that its short tax year beginning 

March 15 and ending December 31 consists of 292 

days.

2. Next, it divides 292 by 4 to determine the length of 

each quarter, 73 days.

3. Finally, it divides 73 by 2 to determine the midpoint of 

each quarter, the 37th day.

The following table shows the quarters of Tara Corporation's short tax year, the midpoint of each quarter, and the 

date in each quarter that Tara must treat its property as 

placed in service.

Quarter Midpoint Placed in 

Service

3/15 – 5/26 4/20 4/15

5/27 – 8/07 7/02 7/01

8/08 – 10/19 9/13 9/01

10/20 – 12/31 11/25 11/15

The last quarter of the short tax year begins on October 

20, which is 73 days from December 31, the end of the tax 

year. The 37th day of the last quarter is November 25, 

which is the midpoint of the quarter. November 25 is not 

the first day or the midpoint of November, so Tara Corporation must treat the property as placed in service in the 

middle of November (the nearest preceding first day or 

midpoint of that month).

Property Placed in Service in a Short

Tax Year

To figure your MACRS depreciation deduction for the 

short tax year, you must first determine the depreciation 

for a full tax year. You do this by multiplying your basis in 

the property by the applicable depreciation rate. Then, determine the depreciation for the short tax year. Do this by 

multiplying the depreciation for a full tax year by a fraction. 

The numerator (top number) of the fraction is the number 

of months (including parts of a month) the property is treated as in service during the tax year (applying the applicable convention). The denominator (bottom number) is 12. 

See Depreciation After a Short Tax Year, later, for information on how to figure depreciation in later years.

Example 1—half-year convention. Tara Corporation, 

with a short tax year beginning March 15 and ending December 31, placed in service on March 16 an item of 

5-year property with a basis of $1,000. This is the only 

property the corporation placed in service during the short 

tax year. Tara does not elect to claim a section 179 deduction and the property does not qualify for a special depreciation allowance. The depreciation method for this property is the 200% declining balance method. The 

depreciation rate is 40% and Tara applies the half-year 

convention.

Tara treats the property as placed in service on

August 1. The determination of this August 1 date is explained in the example illustrating the half-year convention 

under Using the Applicable Convention in a Short Tax 

Year, earlier. Tara is allowed 5 months of depreciation for 

the short tax year that consists of 10 months. The corporation first multiplies the basis ($1,000) by 40% (the declining balance rate) to get the depreciation for a full tax year 

of $400. The corporation then multiplies $400 by 5/12 to 

get the short tax year depreciation of $167.

Example 2—mid-quarter convention. Tara Corporation, with a short tax year beginning March 15 and ending 

December 31, placed in service on October 16 an item of 

5-year property with a basis of $1,000. Tara does not elect 

to claim a section 179 deduction and the property does 

44 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
not qualify for a special depreciation allowance. The depreciation method for this property is the 200% declining 

balance method. The depreciation rate is 40%. The corporation must apply the mid-quarter convention because 

the property was the only item placed in service that year 

and it was placed in service in the last 3 months of the tax 

year.

Tara treats the property as placed in service on September 1. This date is shown in the table provided in the 

example illustrating the mid-quarter convention under Using the Applicable Convention in a Short Tax Year, earlier, 

for property that Tara Corporation placed in service during 

the quarter that begins on August 8 and ends on October 

19. Under MACRS, Tara is allowed 4 months of depreciation for the short tax year that consists of 10 months. The 

corporation first multiplies the basis ($1,000) by 40% to 

get the depreciation for a full tax year of $400. The corporation then multiplies $400 by 4/12 to get the short tax year 

depreciation of $133.

Property Placed in Service Before a Short 

Tax Year

If you have a short tax year after the tax year in which you 

began depreciating property, you must change the way 

you figure depreciation for that property. If you were using 

the percentage tables, you can no longer use them. You 

must figure depreciation for the short tax year and each 

later tax year as explained next.

Depreciation After a Short Tax Year

You can use either of the following methods to figure the 

depreciation for years after a short tax year.

• The simplified method.

• The allocation method.

You must use the method you choose consistently.

Using the simplified method for a 12-month year. Under the simplified method, you figure the depreciation for a 

later 12-month year in the recovery period by multiplying 

the adjusted basis of your property at the beginning of the 

year by the applicable depreciation rate.

Example. Assume the same facts as in Example 1 under Property Placed in Service in a Short Tax Year, earlier. 

The Tara Corporation claimed depreciation of $167 for its 

short tax year. The adjusted basis on January 1 of the next 

year is $833 ($1,000 − $167). Tara's depreciation for that 

next year is 40% of $833, or $333.

Using the simplified method for a short tax year. If a 

later tax year in the recovery period is a short tax year, you 

figure depreciation for that year by multiplying the adjusted 

basis of the property at the beginning of the tax year by 

the applicable depreciation rate, and then by a fraction. 

The fraction's numerator is the number of months (including parts of a month) in the tax year. Its denominator is 12.

Using the simplified method for an early disposition. 

If you dispose of property in a later tax year before the end 

of the recovery period, determine the depreciation for the 

year of disposition by multiplying the adjusted basis of the 

property at the beginning of the tax year by the applicable 

depreciation rate and then multiplying the result by a fraction. The fraction's numerator is the number of months (including parts of a month) the property is treated as in 

service during the tax year (applying the applicable convention). Its denominator is 12.

Using the allocation method for a 12-month or short 

tax year. Under the allocation method, you figure the depreciation for each later tax year by allocating to that year 

the depreciation attributable to the parts of the recovery 

years that fall within that year. Whether your tax year is a 

12-month or short tax year, you figure the depreciation by 

determining which recovery years are included in that 

year. For each recovery year included, multiply the depreciation attributable to that recovery year by a fraction. The 

fraction's numerator is the number of months (including 

parts of a month) that are included in both the tax year and 

the recovery year. Its denominator is 12. The allowable depreciation for the tax year is the sum of the depreciation 

figured for each recovery year.

Example. Assume the same facts as in Example 1 under Property Placed in Service in a Short Tax Year, earlier. 

The Tara Corporation's first tax year after the short tax 

year is a full year of 12 months, beginning January 1 and 

ending December 31. The first recovery year for the 

5-year property placed in service during the short tax year 

extends from August 1 to July 31. Tara deducted 5 months 

of the first recovery year on its short-year tax return. Seven 

months of the first recovery year and 5 months of the second recovery year fall within the next tax year. The depreciation for the next tax year is $333, which is the sum of 

the following.

• $233—The depreciation for the first recovery year 

($400 × 7/12).

• $100—The depreciation for the second recovery year. 

This is figured by multiplying the adjusted basis of 

$600 ($1,000 − $400) by 40% (0.40), then multiplying 

the $240 result by 5/12.

Using the allocation method for an early disposition. 

If you dispose of property before the end of the recovery 

period in a later tax year, determine the depreciation for 

the year of disposition by multiplying the depreciation figured for each recovery year (or part of a recovery year) included in the tax year by a fraction. The numerator of the 

fraction is the number of months (including parts of 

months) the property is treated as in service in the tax 

year (applying the applicable convention). The denominator is 12. If there is more than one recovery year in the tax 

year, you add together the depreciation for each recovery 

year.

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 45
How Do You Use General Asset 

Accounts?

Terms you may need to know 

(see Glossary):

Adjusted basis

Amortization

Amount realized

Basis

Convention

Disposition

Exchange

Placed in service

Recovery period

Section 1245 property

Unadjusted basis

To make it easier to figure MACRS depreciation, you can 

group separate properties into one or more general asset 

accounts (GAAs). You can then depreciate all the properties in each account as a single item of property.

Property you cannot include. You cannot include property in a GAA if you use it in both a personal activity and a 

trade or business (or for the production of income) in the 

year in which you first place it in service. If property you included in a GAA is later used in a personal activity, see 

Terminating GAA Treatment, later.

Property generating foreign source income. For information on the GAA treatment of property that generates 

foreign source income, see sections 1.168(i)-1(c)(1)(ii) 

and (f) of the regulations.

Change in use. Special rules apply to figuring depreciation for property in a GAA for which the use changes during the tax year. Examples include a change in use resulting in a shorter recovery period and/or a more accelerated 

depreciation method or a change in use resulting in a longer recovery period and/or a less accelerated depreciation method. See sections 1.168(i)-1(h) and 1.168(i)-4 of 

the regulations.

Grouping Property

Each GAA must include only property you placed in service in the same tax year and that has the following in common.

• Recovery period.

• Depreciation method.

• Convention.

The following rules also apply when you establish a 

GAA.

• Mid-quarter convention. Property subject to the 

mid-quarter convention can only be grouped into a 

GAA with property placed in service in the same quarter of the tax year.

• Mid-month convention. Property subject to the 

mid-month convention can only be grouped into a 

GAA with property placed in service in the same 

month of the tax year.

• Passenger automobiles. Passenger automobiles 

subject to the limits on passenger automobile depreciation must be grouped into a separate GAA.

See section 1.168(i)-1(c)(2)(ii) of the regulations for additional rules that apply when you establish a GAA.

Figuring Depreciation for a GAA

After you have set up a GAA, you generally figure the 

MACRS depreciation for it by using the applicable depreciation method, recovery period, and convention for the 

property in the GAA. For each GAA, record the depreciation allowance in a separate depreciation reserve account.

Example. Make & Sell, a calendar year corporation, 

set up a GAA for 10 machines. The machines cost a total 

of $10,000 and were placed in service in June 2023. One 

of the machines cost $8,200 and the rest cost a total of 

$1,800. This GAA is depreciated under the 200% declining balance method with a 5-year recovery period and a 

half-year convention. Make & Sell did not claim the section 

179 deduction on the machines and the machines did not 

qualify for a special depreciation allowance. The depreciation allowance for 2023 is $2,000 [($10,000 × 40% (0.40)) 

÷ 2]. As of January 1, 2024, the depreciation reserve account is $2,000.

Passenger automobiles. To figure depreciation on passenger automobiles in a GAA, apply the deduction limits 

discussed in chapter 5 under Do the Passenger Automobile Limits Apply. Multiply the amount determined using 

these limits by the number of automobiles originally included in the account, reduced by the total number of automobiles removed from the GAA, as discussed under Terminating GAA Treatment, later.

Disposing of GAA Property

When you dispose of property included in a GAA, the following rules generally apply.

• Neither the unadjusted depreciable basis (defined 

later) nor the depreciation reserve account of the GAA 

is affected. You continue to depreciate the account as 

if the disposition had not occurred.

• The property is treated as having an adjusted basis of 

zero, so you cannot realize a loss on the disposition. If 

the property is transferred to a supplies, scrap, or similar account, its basis in that account is zero.

46 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
• Any amount realized on the disposition is treated as 

ordinary income, up to the limit discussed later under 

Treatment of amount realized.

However, these rules do not apply to any disposition 

described later under Terminating GAA Treatment.

Disposition. Property in a GAA is considered disposed 

of when you do any of the following.

• Permanently withdraw it from use in your trade or business or from the production of income.

• Transfer it to a supplies, scrap, or similar account.

• Sell, exchange, retire, physically abandon, or destroy 

it.

The retirement of a structural component of real property 

is not a disposition unless it is a partial disposition. See 

section 1.168(i)-1(e)(1) of the regulations.

Treatment of amount realized. When you dispose of 

property in a GAA, you must recognize any amount realized from the disposition as ordinary income, up to a limit. 

The limit is:

1. The unadjusted depreciable basis of the GAA, plus

2. Any expensed costs for property in the GAA that are 

subject to recapture as depreciation (not including 

any expensed costs for property that you removed 

from the GAA under the rules discussed later under 

Terminating GAA Treatment), minus 

3. Any amount previously recognized as ordinary income upon the disposition of other property from the 

GAA.

Unadjusted depreciable basis. The unadjusted depreciable basis of a GAA is the total of the unadjusted depreciable bases of all the property in the GAA. The unadjusted depreciable basis of an item of property in a GAA is 

the amount you would use to figure gain or loss on its sale, 

but figured without reducing your original basis by any depreciation allowed or allowable in earlier years. However, 

you do reduce your original basis by other amounts, including any amortization deduction, section 179 deduction, special depreciation allowance, and electric vehicle 

credit.

Expensed costs. Expensed costs that are subject to 

recapture as depreciation include the following.

1. The section 179 deduction.

2. Amortization deductions for the following.

a. Pollution control facilities.

b. Removal of barriers for the elderly and disabled.

c. Tertiary injectants.

d. Reforestation expenses.

Example 1. The facts are the same as in the example 

under Figuring Depreciation for a GAA, earlier. In February 

2024, Make & Sell sells the machine that cost $8,200 to 

an unrelated person for $9,000. The machine is treated as 

having an adjusted basis of zero.

On its 2024 tax return, Make & Sell recognizes the 

$9,000 amount realized as ordinary income because it is 

not more than the GAA's unadjusted depreciable basis 

($10,000) plus any expensed cost (for example, the section 179 deduction) for property in the GAA ($0), minus 

any amounts previously recognized as ordinary income 

because of dispositions of other property from the GAA 

($0).

The unadjusted depreciable basis and depreciation reserve of the GAA are not affected by the sale of the machine. The depreciation allowance for the GAA in 2024 is 

$3,200 [($10,000 − $2,000) × 40% (0.40)].

Example 2. Assume the same facts as in Example 1. 

In June 2025, Make & Sell sells seven machines to an unrelated person for a total of $1,100. These machines are 

treated as having an adjusted basis of zero.

On its 2025 tax return, Make & Sell recognizes $1,000 

as ordinary income. This is the GAA's unadjusted depreciable basis ($10,000) plus the expensed costs ($0), minus 

the amount previously recognized as ordinary income 

($9,000). The remaining amount realized of $100 ($1,100 

− $1,000) is section 1231 gain (discussed in chapter 3 of 

Pub. 544).

The unadjusted depreciable basis and depreciation reserve of the GAA are not affected by the disposition of the 

machines. The depreciation allowance for the GAA in 

2025 is $1,920 [($10,000 − $5,200) × 40% (0.40)].

Terminating GAA Treatment

You must remove the following property from a GAA.

• Property held by a partnership that terminates under 

section 708(b)(1).

• Property you dispose of in a nonrecognition transaction or an abusive transaction.

• Property you dispose of in a qualifying disposition or in 

a disposition of all the property in the GAA, if you 

choose to terminate GAA treatment.

• Property you dispose of in a like-kind exchange or an 

involuntary conversion.

• Property you change to personal use.

• Property for which you must recapture any allowable 

credit or deduction, such as the investment credit, the 

credit for qualified electric vehicles, the credit for alternative fuel vehicle refueling property, the section 179 

deduction, or the deduction for clean-fuel vehicles and 

clean-fuel vehicle refueling property placed in service 

before 2006.

If you remove property from a GAA, you must make the 

following adjustments.

1. Reduce the unadjusted depreciable basis of the GAA 

by the unadjusted depreciable basis of the property 

as of the first day of the tax year in which the disposition, change in use, partnership technical termination, 

or recapture event occurs. You can use any reasonable method that is consistently applied to determine 

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 47
the unadjusted depreciable basis of the property you 

remove from a GAA.

2. Reduce the depreciation reserve account by the depreciation allowed or allowable for the property (computed in the same way as computed for the GAA) as 

of the end of the tax year immediately preceding the 

year in which the disposition, change in use, or recapture event occurs.

These adjustments have no effect on the recognition and 

character of prior dispositions subject to the rules discussed earlier under Disposing of GAA Property.

Nonrecognition transactions. If you dispose of GAA 

property in a nonrecognition transaction, you must remove 

it from the GAA. The following are nonrecognition transactions.

• The receipt by one corporation of property distributed 

in complete liquidation of another corporation.

• The transfer of property to a corporation solely in exchange for stock in that corporation if the transferor is 

in control of the corporation immediately after the exchange.

• The transfer of property by a corporation that is a party 

to a reorganization in exchange solely for stock and 

securities in another corporation that is also a party to 

the reorganization.

• The contribution of property to a partnership in exchange for an interest in the partnership.

• The distribution of property (including money) from a 

partnership to a partner.

• Any transaction between members of the same affiliated group during any year for which the group makes 

a consolidated return.

Rules for recipient (transferee). The recipient of the 

property (the person to whom it is transferred) must include your (the transferor's) adjusted basis in the property 

in a GAA. If you transferred either all of the property, the 

last item of property, or the remaining portion of the last 

item of property, in a GAA, the recipient’s basis in the 

property is the result of the following.

• The adjusted depreciable basis of the GAA as of the 

beginning of your tax year in which the transaction 

takes place, minus

• The depreciation allowable to you for the year of the 

transfer.

For this purpose, the adjusted depreciable basis of a 

GAA is the unadjusted depreciable basis of the GAA minus any depreciation allowed or allowable for the GAA.

Abusive transactions. If you dispose of GAA property in 

an abusive transaction, you must remove it from the GAA. 

A disposition is an abusive transaction if it is not a nonrecognition transaction (described earlier) or a like-kind exchange or involuntary conversion and a main purpose for 

the disposition is to get a tax benefit or a result that would 

not be available without the use of a GAA. Examples of 

abusive transactions include the following.

1. A transaction with a main purpose of shifting income 

or deductions among taxpayers in a way that would 

not be possible without choosing to use a GAA to take 

advantage of differing effective tax rates.

2. A choice to use a GAA with a main purpose of disposing of property from the GAA so that you can use an 

expiring net operating loss or credit. For example, if 

you have a net operating loss carryover or a credit 

carryover, the following transactions will be considered abusive transactions unless there is strong evidence to the contrary.

a. A transfer of GAA property to a related person.

b. A transfer of GAA property under an agreement 

where the property continues to be used, or is 

available for use, by you.

Figuring gain or loss. You must determine the gain, 

loss, or other deduction due to an abusive transaction by 

taking into account the property's adjusted basis. The adjusted basis of the property at the time of the disposition is 

the result of the following.

• The unadjusted depreciable basis of the property, minus

• The depreciation allowed or allowable for the property 

figured by using the depreciation method, recovery 

period, and convention that applied to the GAA in 

which the property was included.

If there is a gain, the amount subject to recapture as ordinary income is the smaller of the following.

1. The depreciation allowed or allowable for the property, 

including any expensed cost (such as section 179 deductions) or the special depreciation allowance for the 

property.

2. The result of the following.

a. The original unadjusted depreciable basis of the 

GAA (plus, for section 1245 property originally included in the GAA, any expensed cost), minus

b. The total gain previously recognized as ordinary 

income on the disposition of property from the 

GAA.

Qualifying dispositions. If you dispose of GAA property 

in a qualifying disposition, you can choose to remove the 

property from the GAA. A qualifying disposition is one that 

does not involve all the property, or the last item of property, remaining in a GAA and that is described by any of 

the following.

1. A disposition that is a direct result of fire, storm, shipwreck, other casualty, or theft.

2. A charitable contribution for which a deduction is allowed.

3. A disposition that is a direct result of a cessation, termination, or disposition of a business, manufacturing 

or other income-producing process, operation, facility, 

plant, or other unit (other than by transfer to a 

supplies, scrap, or similar account).

48 Chapter 4 Figuring Depreciation Under MACRS Publication 946 (2023)
4. A nontaxable transaction other than a nonrecognition 

transaction (described earlier), a like-kind exchange 

or involuntary conversion, a technical termination of a 

partnership, or a transaction that is nontaxable only 

because it is a disposition from a GAA.

If you choose to remove the property from the GAA, figure your gain, loss, or other deduction resulting from the 

disposition in the manner described earlier under Abusive 

transactions.

Like-kind exchanges and involuntary conversions. If 

you dispose of GAA property as a result of a like-kind exchange or involuntary conversion, you must remove from 

the GAA the property that you transferred. See chapter 1 

of Pub. 544 for information on these transactions. Figure 

your gain, loss, or other deduction resulting from the disposition in the manner described earlier under Abusive 

transactions.

Example. Sankofa, a calendar year corporation, maintains one GAA for 12 machines. Each machine costs 

$15,000 and was placed in service in 2021. Of the 12 machines, nine cost a total of $135,000 and are used in Sankofa's New York plant and three machines cost $45,000 

and are used in Sankofa's New Jersey plant. Assume this 

GAA uses the 200% declining balance depreciation 

method, a 5-year recovery period, and a half-year convention. Sankofa does not claim the section 179 deduction 

and the machines do not qualify for a special depreciation 

allowance. As of January 1, 2023, the depreciation reserve account for the GAA is $93,600.

In May 2023, Sankofa sells its entire manufacturing 

plant in New Jersey to an unrelated person. The sales 

proceeds allocated to each of the three machines at the 

New Jersey plant is $5,000. This transaction is a qualifying disposition, so Sankofa chooses to remove the three 

machines from the GAA and figure the gain, loss, or other 

deduction by taking into account their adjusted bases.

For Sankofa's 2023 return, the depreciation allowance 

for the GAA is figured as follows. As of December 31, 

2022, the depreciation allowed or allowable for the three 

machines at the New Jersey plant is $23,400. As of January 1, 2023, the unadjusted depreciable basis of the GAA 

is reduced from $180,000 to $135,000 ($180,000 minus 

the $45,000 unadjusted depreciable bases of the three 

machines), and the depreciation reserve account is decreased from $93,600 to $70,200 ($93,600 minus 

$23,400 depreciation allowed or allowable for the three 

machines as of December 31, 2022). The depreciation allowance for the GAA in 2023 is $25,920 [($135,000 − 

$70,200) × 40% (0.40)].

For Sankofa's 2023 return, gain or loss for each of the 

three machines at the New Jersey plant is determined as 

follows. The depreciation allowed or allowable in 2023 for 

each machine is $1,440 [(($15,000 − $7,800) × 40% 

(0.40)) ÷ 2]. The adjusted basis of each machine is $5,760 

(the adjusted depreciable basis of $7,200 removed from 

the account less the $1,440 depreciation allowed or allowable in 2023). As a result, the loss recognized in 2023 for 

each machine is $760 ($5,760 − $5,000). This loss is subject to section 1231 treatment. See chapter 3 of Pub. 544 

for information on section 1231 losses.

Disposition of all property in a GAA. If you dispose of 

all the property, or the last item of property, in a GAA, you 

can choose to end the GAA. If you make this choice, you 

figure the gain or loss by comparing the adjusted depreciable basis of the GAA with the amount realized.

If there is a gain, the amount subject to recapture as ordinary income is limited to the result of the following.

• The depreciation allowed or allowable for the GAA, including any expensed cost (such as section 179 deductions or the additional depreciation allowed or allowable for the GAA), minus

• The total gain previously recognized as ordinary income on the disposition of property from the GAA.

Like-kind exchanges and involuntary conversions. 

If you dispose of all the property or the last item of property in a GAA as a result of a like-kind exchange or involuntary conversion, the GAA terminates. You must figure 

the gain or loss in the manner described above under Disposition of all property in a GAA.

Example. Duforcelf, a calendar year corporation, 

maintains a GAA for 1,000 calculators that cost a total of 

$60,000 and were placed in service in 2020. Assume this 

GAA is depreciated under the 200% declining balance 

method, has a recovery period of 5 years, and uses a 

half-year convention. Duforcelf does not claim the section 

179 deduction and the calculators do not qualify for a special depreciation allowance. In 2022, Duforcelf sells 200 of 

the calculators to an unrelated person for $10,000. The 

$10,000 is recognized as ordinary income.

In March 2023, Duforcelf sells the remaining calculators 

in the GAA to an unrelated person for $35,000. Duforcelf 

decides to end the GAA.

On the date of the disposition, the adjusted depreciable 

basis of the account is $23,040 (unadjusted depreciable 

basis of $60,000 minus the depreciation allowed or allowable of $36,960). In 2023, Duforcelf recognizes a gain of 

$11,960. This is the amount realized of $35,000 minus the 

adjusted depreciable basis of $23,040. The gain subject 

to recapture as ordinary income is limited to the depreciation allowed or allowable minus the amounts previously 

recognized as ordinary income ($36,960 − $10,000 = 

$26,960). Therefore, the entire gain of $11,960 is recaptured as ordinary income.

Electing To Use a GAA

An election to include property in a GAA is made separately by each owner of the property. This means that an 

election to include property in a GAA must be made by 

each member of a consolidated group and at the partnership or S corporation level (and not by each partner or 

shareholder separately).

How to make the election. Make the election by completing line 18 of Form 4562.

Publication 946 (2023) Chapter 4 Figuring Depreciation Under MACRS 49
When to make the election. You must make the election 

on a timely filed tax return (including extensions) for the 

year in which you place in service the property included in 

the GAA. However, if you timely filed your return for the 

year without making the election, you can still make the 

election by filing an amended return within 6 months of the 

due date of the return (excluding extensions). Attach the 

election to the amended return and write “Filed pursuant 

to section 301.9100-2” on the election statement.

You must maintain records that identify the property included in each GAA, that establish the unadjusted depreciable basis and depreciation reserve of the GAA, and that reflect the amount realized 

during the year upon dispositions from each GAA. However, see chapter 2 for the recordkeeping requirements for 

section 179 property.

Revoking an election. You can revoke an election to use 

a GAA only in the following situations.

• You include in the GAA property that generates foreign 

source income both U.S. and foreign source income, 

or combined gross income of a foreign sales corporation, a domestic international sales corporation, or a 

possessions corporation and its related supplier, and 

that inclusion results in a substantial distortion of income.

• You remove property from the GAA, as described under Terminating GAA Treatment, earlier.

When Do You Recapture

MACRS Depreciation?

Terms you may need to know 

(see Glossary):

Disposition

Nonresidential real property

Recapture

Residential rental property

When you dispose of property that you depreciated using 

MACRS, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the 

amount of the depreciation previously allowed or allowable for the property. Depreciation, for this purpose, includes the following.

• Any section 179 deduction claimed on the property.

• Any deduction under section 179B of the Internal Revenue Code for capital costs to comply with Environmental Protection Agency sulfur regulations.

• Any deduction under section 179C of the Internal Revenue Code for certain qualified refinery property 

RECORDS

placed in service after August 8, 2005, and before 

January 1, 2014.

• Any deduction under section 179D of the Internal Revenue Code for certain energy efficient commercial 

building property placed in service after December 31, 

2005.

• Any deduction under section 179E of the Internal Revenue Code for qualified advanced mine safety equipment property placed in service after December 20, 

2006, and before January 1, 2018.

• Any deduction under section 190 of the Internal Revenue Code for removal of barriers to the disabled and 

the elderly.

• Any deduction under section 193 of the Internal Revenue Code for tertiary injectants.

• Any special depreciation allowance previously allowed 

or allowable for the property (unless you elected not to 

claim it).

There is no recapture for residential rental and nonresidential real property unless that property is qualified property for which you claimed a special depreciation allowance. For more information on depreciation recapture, see 

Pub. 544.

5.

Additional Rules for 

Listed Property

Introduction

This chapter discusses the deduction limits and other special rules that apply to certain listed property. Listed property includes cars and other property used for transportation, property used for entertainment, and certain 

computers.

Deductions for listed property (other than certain 

leased property) are subject to the following special rules 

and limits.

• Deduction for employees. If your use of the property 

is not for your employer's convenience or is not required as a condition of your employment, you cannot 

deduct depreciation or rent expenses for your use of 

the property as an employee.

• Business-use requirement. If the property is not 

used predominantly (more than 50%) for qualified 

business use, you cannot claim the section 179 deduction or a special depreciation allowance. In addition, you must figure any depreciation deduction under 

MACRS using the straight line method over the ADS 

50 Chapter 5 Additional Rules for Listed Property Publication 946 (2023)
recovery period. You may also have to recapture (include in income) any excess depreciation claimed in 

previous years. A similar inclusion amount applies to 

certain leased property.

• Passenger automobile limits and rules. Annual 

limits apply to depreciation deductions (including section 179 deductions and any special depreciation allowance) for certain passenger automobiles. You can 

continue to deduct depreciation for the unrecovered 

basis resulting from these limits after the end of the recovery period.

This chapter defines listed property and explains the 

special rules and depreciation deduction limits that apply, 

including the special inclusion amount rule for leased 

property. It also discusses the recordkeeping rules for listed property and explains how to report information about 

the property on your tax return.

Useful Items

You may want to see:

Publication

Travel, Gift, and Car Expenses

Business Use of Your Home

Form (and Instructions)

Employee Business Expenses

Depreciation and Amortization

Sales of Business Property

See How To Get Tax Help for information about getting 

publications and forms.

What Is Listed Property?

Terms you may need to know 

(see Glossary):

Capitalized

Commuting

Improvement

Recovery period

Straight line method

Listed property is any of the following.

• Passenger automobiles (as defined later).

• Any other property used for transportation, unless it is 

an excepted vehicle.

• Property generally used for entertainment, recreation, 

or amusement (including photographic, phonographic, 

communication, and video recording equipment).

Improvements to listed property. An improvement 

made to listed property that must be capitalized is treated 

 463 

 587 

 2106 

 4562 

 4797 

as a new item of depreciable property. The recovery period and method of depreciation that apply to the listed 

property as a whole also apply to the improvement. For 

example, if you must depreciate the listed property using 

the straight line method, you must also depreciate the improvement using the straight line method.

Passenger Automobiles

A passenger automobile is any four-wheeled vehicle 

made primarily for use on public streets, roads, and highways and rated at 6,000 pounds or less of unloaded gross 

vehicle weight (6,000 pounds or less of gross vehicle 

weight for trucks and vans). It includes any part, component, or other item physically attached to the automobile 

at the time of purchase or usually included in the purchase 

price of an automobile.

The following vehicles are not considered passenger 

automobiles for these purposes.

• An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business.

• A vehicle used directly in the trade or business of 

transporting persons or property for pay or hire.

• A truck or van that is a qualified nonpersonal use vehicle.

Qualified nonpersonal use vehicles. Qualified nonpersonal use vehicles are vehicles that by their nature are not 

likely to be used more than a minimal amount for personal 

purposes. They include the trucks and vans listed as excepted vehicles under Other Property Used for Transportation next. They also include trucks and vans that have 

been specially modified so that they are not likely to be 

used more than a minimal amount for personal purposes, 

such as by installation of permanent shelving and painting 

the vehicle to display advertising or the company's name.

For a detailed discussion of passenger automobiles, including leased passenger automobiles, see Pub. 463.

Other Property Used for 

Transportation

Although vehicles used to transport persons or 

property for pay or hire and vehicles rated at more 

than the 6,000-pound threshold are not passenger automobiles, they are still “other property used for 

transportation” and are subject to the special rules for listed property.

Other property used for transportation includes trucks, 

buses, boats, airplanes, motorcycles, and any other vehicles used to transport persons or goods.

Excepted vehicles. Other property used for transportation does not include the following qualified nonpersonal 

use vehicles (defined earlier under Passenger Automobiles).

• Clearly marked police and fire vehicles.

CAUTION

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Publication 946 (2023) Chapter 5 Additional Rules for Listed Property 51
• Unmarked vehicles used by law enforcement officers if 

the use is officially authorized.

• Ambulances used as such and hearses used as such.

• Any vehicle with a loaded gross vehicle weight of over 

14,000 pounds that is designed to carry cargo.

• Bucket trucks (cherry pickers), cement mixers, dump 

trucks (including garbage trucks), flatbed trucks, and 

refrigerated trucks.

• Combines, cranes and derricks, and forklifts.

• Delivery trucks with seating only for the driver, or only 

for the driver plus a folding jump seat.

• Qualified moving vans.

• Qualified specialized utility repair trucks.

• School buses used in transporting students and employees of schools.

• Other buses with a capacity of at least 20 passengers 

that are used as passenger buses.

• Tractors and other special purpose farm vehicles.

Clearly marked police or fire vehicle. A clearly 

marked police or fire vehicle is a vehicle that meets all the 

following requirements.

• It is owned or leased by a governmental unit or an 

agency or instrumentality of a governmental unit.

• It is required to be used for commuting by a police officer or firefighter who, when not on a regular shift, is on 

call at all times.

• It is prohibited from being used for personal use (other 

than commuting) outside the limit of the police officer's 

arrest powers or the firefighter's obligation to respond 

to an emergency.

• It is clearly marked with painted insignia or words that 

make it readily apparent that it is a police or fire vehicle. A marking on a license plate is not a clear marking 

for these purposes.

Qualified moving van. A qualified moving van is any 

truck or van used by a professional moving company for 

moving household or business goods if the following requirements are met.

• No personal use of the van is allowed other than for 

travel to and from a move site or for minor personal 

use, such as a stop for lunch on the way from one 

move site to another.

• Personal use for travel to and from a move site happens no more than five times a month on average.

• Personal use is limited to situations in which it is more 

convenient to the employer, because of the location of 

the employee's residence in relation to the location of 

the move site, for the van not to be returned to the employer's business location.

Qualified specialized utility repair truck. A truck is 

a qualified specialized utility repair truck if it is not a van or 

pickup truck and all the following apply.

• The truck was specifically designed for and is used to 

carry heavy tools, testing equipment, or parts.

• Shelves, racks, or other permanent interior construction has been installed to carry and store the tools, 

equipment, or parts and would make it unlikely that the 

truck would be used, other than minimally, for personal 

purposes.

• The employer requires the employee to drive the truck 

home in order to be able to respond in emergency situations for purposes of restoring or maintaining electricity, gas, telephone, water, sewer, or steam utility 

services.

Can Employees Claim a 

Deduction?

If you are an employee, you can claim a depreciation deduction for the use of your listed property (whether owned 

or rented) in performing services as an employee only if 

your use is a business use. The use of your property in 

performing services as an employee is a business use 

only if both the following requirements are met.

• The use is for your employer's convenience.

• The use is required as a condition of your employment.

If these requirements are not met, you cannot deduct 

depreciation (including the section 179 deduction) or rent 

expenses for your use of the property as an employee.

Note. Employee expenses for transportation and for 

the depreciation of certain listed property (such as computers placed in service before 2018) paid or incurred in a 

tax year beginning after December 31, 2017, and before 

January 1, 2026, may not be claimed as a miscellaneous 

itemized deduction subject to the 2% floor. If you are not 

entitled to claim these expenses as an above-the-line deduction, you may not claim a deduction for the expense on 

your 2023 return.

Employer's convenience. Whether the use of listed 

property is for your employer's convenience must be determined from all the facts. The use is for your employer's 

convenience if it is for a substantial business reason of the 

employer. The use of listed property during your regular 

working hours to carry on your employer's business is 

generally for the employer's convenience.

Condition of employment. Whether the use of listed 

property is a condition of your employment depends on all 

the facts and circumstances. The use of property must be 

required for you to perform your duties properly. Your employer does not have to require explicitly that you use the 

property. However, a mere statement by the employer that 

52 Chapter 5 Additional Rules for Listed Property Publication 946 (2023)
the use of the property is a condition of your employment 

is not sufficient.

Example 1. Virginia Sycamore is employed as a courier with We Deliver, which provides local courier services. 

Virginia owns and uses a motorcycle to deliver packages 

to downtown offices. We Deliver explicitly requires all delivery persons to own a car or motorcycle for use in their 

employment. Virginia's use of the motorcycle is for the 

convenience of We Deliver and is required as a condition 

of employment.

Example 2. You are an inspector for Uplift, a construction company with many sites in the local area. You must 

travel to these sites on a regular basis. Uplift does not furnish an automobile or explicitly require you to use your 

own automobile. However, it pays you for any costs you incur in traveling to the various sites. The use of your own 

automobile or a rental automobile is for the convenience 

of Uplift and is required as a condition of employment.

Example 3. Assume the same facts as in Example 2, 

except that Uplift furnishes a car to you, and you choose 

to use your own car and receive payment for using it. The 

use of your own car is neither for the convenience of Uplift 

nor required as a condition of employment.

Example 4. Marilyn Lee is a pilot for Y Company, a 

small charter airline. Y requires pilots to obtain 80 hours of 

flight time annually in addition to flight time spent with the 

airline. Pilots can usually obtain these hours by flying with 

the Air Force Reserve or by flying part-time with another 

airline. Marilyn owns an airplane. The use of that airplane 

to obtain the required flight hours is neither for the convenience of the employer nor required as a condition of employment.

Example 5. David Rule is employed as an engineer 

with Zip, an engineering contracting firm. David occasionally takes work home at night rather than work late in the 

office. David owns and uses a home computer, which is 

virtually identical to the office model. David’s use of the 

computer is neither for the convenience of David’s employer nor required as a condition of employment.

What Is the Business-Use

Requirement?

Terms you may need to know 

(see Glossary):

Adjusted basis

Business/investment use

Capitalized

Commuting

Declining balance method

Fair market value (FMV)

Nonresidential real property

Placed in service

Recapture

Recovery period

Straight line method

You can claim the section 179 deduction and a special depreciation allowance for listed property and depreciate listed property using GDS and a declining balance method if 

the property meets the business-use requirement. To 

meet this requirement, listed property must be used predominantly (more than 50% of its total use) for qualified 

business use. If this requirement is not met, the following 

rules apply.

• Property not used predominantly for qualified business use during the year it is placed in service does 

not qualify for the section 179 deduction.

• Property not used predominantly for qualified business use during the year it is placed in service does 

not qualify for a special depreciation allowance.

• Any depreciation deduction under MACRS for property not used predominantly for qualified business use 

during any year must be figured using the straight line 

method over the ADS recovery period. This rule applies each year of the recovery period.

• Excess depreciation on property previously used predominantly for qualified business use must be recaptured (included in income) in the first year in which it is 

no longer used predominantly for qualified business 

use.

• A lessee must add an inclusion amount to income in 

the first year in which the leased property is not used 

predominantly for qualified business use.

Being required to use the straight line method for 

an item of listed property not used predominantly 

for qualified business use is not the same as 

electing the straight line method. It does not mean that 

you have to use the straight line method for other property 

in the same class as the item of listed property.

Exception for leased property. The business-use requirement generally does not apply to any listed property 

leased or held for leasing by anyone regularly engaged in 

the business of leasing listed property.

You are considered regularly engaged in the business 

of leasing listed property only if you enter into contracts for 

the leasing of listed property with some frequency over a 

continuous period of time. This determination is made on 

the basis of the facts and circumstances in each case and 

takes into account the nature of your business in its entirety. Occasional or incidental leasing activity is insufficient. For example, if you lease only one passenger automobile during a tax year, you are not regularly engaged in 

the business of leasing automobiles. An employer who allows an employee to use the employer's property for 

personal purposes and charges the employee for the use 

CAUTION

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Publication 946 (2023) Chapter 5 Additional Rules for Listed Property 53
is not regularly engaged in the business of leasing the 

property used by the employee.

How To Allocate Use

To determine whether the business-use requirement is 

met, you must allocate the use of any item of listed property used for more than one purpose during the year 

among its various uses.

For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. You determine the percentage of qualified business 

use by dividing the number of miles you drove the vehicle 

for business purposes during the year by the total number 

of miles you drove the vehicle for all purposes (including 

business miles) during the year.

For other listed property, allocate the property's use on 

the basis of the most appropriate unit of time the property 

is actually used (rather than merely being available for 

use). For example, you can determine the percentage of 

business use of an item of listed property by dividing the 

number of hours you used the item of listed property for 

business purposes during the year by the total number of 

hours you used the item of listed property for all purposes 

(including business use) during the year.

Entertainment use. Treat the use of listed property for 

entertainment, recreation, or amusement purposes as a 

business use only to the extent you can deduct expenses 

(other than interest and property tax expenses) due to its 

use as an ordinary and necessary business expense.

Commuting use. The use of an automobile for commuting is not business use, regardless of whether work is performed during the trip. For example, a business telephone 

call made on a car telephone while commuting to work 

does not change the character of the trip from commuting 

to business. This is also true for a business meeting held 

in a car while commuting to work. Similarly, a business call 

made on an otherwise personal trip does not change the 

character of a trip from personal to business. The fact that 

an automobile is used to display material that advertises 

the owner's or user's trade or business does not convert 

an otherwise personal use into business use.

Use of your automobile by another person. If someone else uses your automobile, do not treat that use as 

business use unless one of the following conditions applies.

1. That use is directly connected with your business.

2. You properly report the value of the use as income to 

the other person and withhold tax on the income 

where required.

3. You are paid a fair market rent.

Treat any payment to you for the use of the automobile as 

a rent payment for purposes of item (3).

Employee deductions. If you are an employee, do not 

treat your use of listed property as business use unless it 

is for your employer's convenience and is required as a 

condition of your employment. See Can Employees Claim 

a Deduction, earlier.

Qualified Business Use

Qualified business use of listed property is any use of the 

property in your trade or business. However, it does not include the following uses.

• The leasing of property to any 5% owner or related 

person (to the extent the property is used by a 5% 

owner or person related to the owner or lessee of the 

property).

• The use of property as pay for the services of a 5% 

owner or related person.

• The use of property as pay for services of any person 

(other than a 5% owner or related person), unless the 

value of the use is included in that person's gross income and income tax is withheld on that amount 

where required.

Property does not stop being used predominantly 

for qualified business use because of a transfer at 

death.

Exception for leasing or compensatory use of aircraft. Treat the leasing of any aircraft by a 5% owner or 

related person, or the compensatory use of any aircraft, 

as a qualified business use if at least 25% of the total use 

of the aircraft during the year is for a qualified business 

use.

5% owner. For a business entity that is not a corporation, 

a 5% owner is any person who owns more than 5% of the 

capital or profits interest in the business.

For a corporation, a 5% owner is any person who owns, 

or is considered to own, either of the following.

• More than 5% of the outstanding stock of the corporation.

• Stock possessing more than 5% of the total combined 

voting power of all stock in the corporation.

Related persons. For a description of related persons, 

see Related persons in the discussion on property owned 

or used in 1986 under What Method Can You Use To Depreciate Your Property? in chapter 1. For this purpose, 

however, treat as related persons only the relationships 

listed in items (1) through (10) of that discussion and substitute “50%” for “10%” each place it appears.

Examples. The following examples illustrate whether the 

use of business property is qualified business use.

Example 1. John Maple is the sole proprietor of a 

plumbing contracting business. Richard, John’s sibling, is 

employed by John in the business. As part of Richard's 

pay, Richard is allowed to use one of the company automobiles for personal use. The company includes the value 

of the personal use of the automobile in Richard's gross 

income and properly withholds tax on it. The use of the 

CAUTION

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54 Chapter 5 Additional Rules for Listed Property Publication 946 (2023)
automobile is pay for the performance of services by a related person, so it is not a qualified business use.

Example 2. John, in Example 1, allows unrelated employees to use company automobiles for personal purposes. John does not include the value of the personal use 

of the company automobiles as part of their compensation 

and does not withhold tax on the value of the use of the 

automobiles. This use of company automobiles by employees is not a qualified business use.

Example 3. James Company Inc. owns several automobiles that its employees use for business purposes. 

The employees are also allowed to take the automobiles 

home at night. The FMV of each employee's use of an automobile for any personal purpose, such as commuting to 

and from work, is reported as income to the employee and 

James Company withholds tax on it. This use of company 

automobiles by employees, even for personal purposes, is 

a qualified business use for the company.

Investment Use

The use of property to produce income in a nonbusiness 

activity (investment use) is not a qualified business use. 

However, you can treat the investment use as business 

use to figure the depreciation deduction for the property in 

a given year.

Example 1. You use an item of listed property 50% of 

the time to manage your investments. You also use the 

item of listed property 40% of the time in your part-time 

consumer research business. Your item of listed property 

is listed property because it is not used at a regular business establishment. You do not use the item of listed 

property predominantly for qualified business use. Therefore, you cannot elect a section 179 deduction or claim a 

special depreciation allowance for the item of listed property. You must depreciate it using the straight line method 

over the ADS recovery period. Your combined business/

investment use for determining your depreciation deduction is 90%.

Example 2. If you use your item of listed property 30% 

of the time to manage your investments and 60% of the 

time in your consumer research business, it is used predominantly for qualified business use. You can elect a 

section 179 deduction and, if you do not deduct all the 

item of listed property’s cost, you can claim a special depreciation allowance and depreciate the item of listed 

property using the 200% declining balance method over 

the GDS recovery period. Your combined business/investment use for determining your depreciation deduction is 

90%.

Recapture of Excess Depreciation

If you used listed property more than 50% in a qualified 

business use in the year you placed it in service, you must 

recapture (include in income) excess depreciation in the 

first year you use it 50% or less. You also increase the adjusted basis of your property by the same amount.

Excess depreciation is:

1. The depreciation allowable for the property (including 

any section 179 deduction and special depreciation 

allowance claimed) for years before the first year you 

do not use the property predominantly for qualified 

business use, minus

2. The depreciation that would have been allowable for 

those years if you had not used the property predominantly for qualified business use in the year you 

placed it in service.

To determine the amount in (2) above, you must refigure 

the depreciation using the straight line method and the 

ADS recovery period.

Example. In June 2019, Ellen Rye purchased and 

placed in service a pickup truck that cost $18,000. Ellen 

used it only for qualified business use for 2019 through 

2022. Ellen claimed a section 179 deduction of $10,000 

based on the purchase of the truck. Ellen began depreciating it using the 200% DB method over a 5-year GDS recovery period. The pickup truck's gross vehicle weight 

was over 6,000 pounds, so it was not subject to the passenger automobile limits discussed later under Do the 

Passenger Automobile Limits Apply. During 2023, Ellen 

used the truck 50% for business and 50% for personal 

purposes. Ellen includes $4,018 excess depreciation in 

her gross income for 2023. The excess depreciation is determined as follows.

Total section 179 deduction ($10,000) and 

depreciation claimed ($6,618) for 2019 through 

2022. (Depreciation is from Table A-1.) ....... $16,618

Minus: Depreciation allowable (Table 

A-8):

2019 — 10% of $18,000 .......... $1,800

2020 — 20% of $18,000 .......... 3,600

2021 — 20% of $18,000 .......... 3,600

2022 — 20% of $18,000 .......... 3,600 12,600

Excess depreciation..................... $4,018

If Ellen's use of the truck does not change to 50% for 

business and 50% for personal purposes until 2025, there 

will be no excess depreciation. The total depreciation allowable using Table A-8 through 2025 will be $18,000, 

which equals the total of the section 179 deduction and 

depreciation Ellen will have claimed.

Where to figure and report recapture. Use Form 4797, 

Part IV, to figure the recapture amount. Report the recapture amount as other income on the same form or schedule on which you took the depreciation deduction. For example, report the recapture amount as other income on 

Schedule C (Form 1040) if you took the depreciation deduction on Schedule C. If you took the depreciation deduction on Form 2106, report the recapture amount as 

other income on Schedule 1 (Form 1040), line 8z.

Publication 946 (2023) Chapter 5 Additional Rules for Listed Property 55
Lessee's Inclusion Amount

If you use leased listed property other than a passenger 

automobile for business/investment use, you must include 

an amount in your income in the first year your qualified 

business-use percentage is 50% or less. Your qualified 

business-use percentage is the part of the property's total 

use that is qualified business use (defined earlier). For the 

inclusion amount rules for a leased passenger automobile, 

see Leasing a Car in chapter 4 of Pub. 463.

The inclusion amount is the sum of Amount A and 

Amount B, described next. However, see the special rules 

for the inclusion amount, later, if your lease begins in the 

last 9 months of your tax year or is for less than 1 year.

Amount A. Amount A is:

1. The FMV of the property, multiplied by

2. The business/investment use for the first tax year the 

qualified business-use percentage is 50% or less, 

multiplied by

3. The applicable percentage from Table A-19 in Appendix A.

The FMV of the property is the value on the first day of 

the lease term. If the capitalized cost of an item of listed 

property is specified in the lease agreement, you must 

treat that amount as the FMV.

Amount B. Amount B is:

1. The FMV of the property, multiplied by

2. The average of the business/investment use for all tax 

years the property was leased that precede the first 

tax year the qualified business-use percentage is 50% 

or less, multiplied by

3. The applicable percentage from Table A-20 in Appendix A.

Maximum inclusion amount. The inclusion amount 

cannot be more than the sum of the deductible amounts of 

rent for the tax year in which the lessee must include the 

amount in gross income.

Inclusion amount worksheet. The following worksheet 

is provided to help you figure the inclusion amount for 

leased listed property.

Inclusion Amount Worksheet

for Leased Listed Property 

Keep for Your Records

1. Fair market value .......................

2. Business/investment use for first year 

business use is 50% or less .............

3. Multiply line 1 by line 2 ..................

4. Rate (%) from Table A-19 ...............

5. Multiply line 3 by line 4. This is Amount 

A .....................................

6. Fair market value .......................

7. Average business/investment use for 

years property leased before the first year 

business use is 50% or less . . . . . . . . . . . . .

8. Multiply line 6 by line 7 ..................

9. Rate (%) from Table A-20 ...............

10. Multiply line 8 by line 9. This is Amount 

B .....................................

11. Add line 5 and line 10. This is your 

inclusion amount. Enter here and as other 

income on the form or schedule on which 

you originally took the deduction (for 

example, Schedule C or F (Form 1040), 

Schedule 1 (Form 1040), Form 1120, 

etc.) ..................................

Example. On February 1, 2021, Larry House, a calendar year taxpayer, leased and placed in service an item of 

listed property with an FMV of $3,000. The lease is for a 

period of 5 years. Larry does not use the item of listed 

property at a regular business establishment, so it is listed 

property. Larry’s business use of the property (all of which 

is qualified business use) is 80% in 2021, 60% in 2022, 

and 40% in 2023. Larry must add an inclusion amount to 

gross income for 2023, the first tax year Larry’s qualified 

business-use percentage is 50% or less. The item of listed 

property has a 5-year recovery period under both GDS 

and ADS. 2023 is the third tax year of the lease, so the applicable percentage from Table A-19 is −19.8%. The applicable percentage from Table A-20 is 22%. Larry's deductible rent for the item of listed property for 2023 is $800.

Larry uses the inclusion amount worksheet to figure the 

amount that must be included in income for 2023. Larry’s 

inclusion amount is $224, which is the sum of −$238 

(Amount A) and $462 (Amount B).

Inclusion Amount Worksheet

for Leased Listed Property 

Keep for Your Records

1. Fair market value ..................... $3,000

2. Business/investment use for first year 

business use is 50% or less ........... 40%

3. Multiply line 1 by line 2 ................ 1,200

4. Rate (%) from Table A-19 ............. −19.8%

5. Multiply line 3 by line 4. This is Amount 

A ................................... −238

6. Fair market value ..................... 3,000

7. Average business/investment use for 

years property leased before the first 

year business use is 50% or less ...... 70%

8. Multiply line 6 by line 7 ................ 2,100

9. Rate (%) from Table A-20 ............. 22.0%

10. Multiply line 8 by line 9. This is Amount 

B ................................... 462

56 Chapter 5 Additional Rules for Listed Property Publication 946 (2023)
11. Add line 5 and line 10. This is your 

inclusion amount. Enter here and as 

other income on the form or schedule 

on which you originally took the 

deduction (for example, Schedule C or F 

(Form 1040), Schedule 1 (Form 1040), 

Form 1120, etc.) ..................... $224

Lease beginning in the last 9 months of your tax 

year. The inclusion amount is subject to a special rule if 

all the following apply.

• The lease term begins within 9 months before the 

close of your tax year.

• You do not use the property predominantly (more than 

50%) for qualified business use during that part of the 

tax year.

• The lease term continues into your next tax year.

Under this special rule, add the inclusion amount to income in the next tax year. Figure the inclusion amount by 

taking into account the average of the business/investment use for both tax years (line 2 of the Inclusion Amount 

Worksheet for Leased Listed Property) and the applicable 

percentage for the tax year the lease term begins. Skip 

lines 6 through 9 of the worksheet and enter zero on 

line 10.

Example 1. On August 1, 2022, Julie Rule, a calendar 

year taxpayer, leased and placed in service an item of listed property. The property is 5-year property with an FMV 

of $10,000. Julie’s property has a recovery period of 5 

years under ADS. The lease is for 5 years. Julie’s business use of the property was 50% in 2022 and 90% in 

2023. Julie paid rent of $3,600 for 2022, of which $3,240 

is deductible. Julie must include $147 in income in 2023. 

The $147 is the sum of Amount A and Amount B. Amount 

A is $147 ($10,000 × 70% (0.70) × 2.1% (0.021)), the 

product of the FMV, the average business use for 2022 

and 2023, and the applicable percentage for year 1 from 

Table A-19. Amount B is zero.

Lease for less than 1 year. A special rule for the inclusion amount applies if the lease term is less than 1 year 

and you do not use the property predominantly (more than 

50%) for qualified business use. The amount included in 

income is the inclusion amount (figured as described in 

the preceding discussions) multiplied by a fraction. The 

numerator of the fraction is the number of days in the 

lease term, and the denominator is 365 (or 366 for leap 

years).

The lease term for listed property includes options to 

renew. If you have two or more successive leases that are 

part of the same transaction (or a series of related transactions) for the same or substantially similar property, treat 

them as one lease.

Example 2. On October 1, 2022, John Joyce, a calendar year taxpayer, leased and placed in service an item of 

listed property that is 3-year property. This property had 

an FMV of $15,000 and a recovery period of 5 years under ADS. The lease term was 6 months (ending on March 

31, 2023), during which John used the property 45% in 

business. John must include $71 in income in 2023. The 

$71 is the sum of Amount A and Amount B. Amount A is 

$71 ($15,000 × 45% (0.45) × 2.1% (0.021) × 183/365), the 

product of the FMV, the average business use for both 

years, and the applicable percentage for year 1 from Table 

A-19, prorated for the length of the lease. Amount B is 

zero.

Where to report the inclusion amount. Report the inclusion amount figured (as described in the preceding discussions) as other income on the same form or schedule 

on which you took the deduction for your rental costs. For 

example, report the inclusion amount as other income on 

Schedule C (Form 1040) if you took the deduction on 

Schedule C. If you took the deduction for rental costs on 

Form 2106, report the inclusion amount as other income 

on Schedule 1 (Form 1040), line 8z.

Do the Passenger Automobile 

Limits Apply?

Terms you may need to know 

(see Glossary):

Basis

Convention

Placed in service

Recovery period

The depreciation deduction, including the section 179 deduction and special depreciation allowance, you can claim 

for a passenger automobile (defined earlier) each year is 

limited.

This section describes the maximum depreciation deduction amounts for 2023 and explains how to deduct, after the recovery period, the unrecovered basis of your 

property that results from applying the passenger automobile limits.

Exception for leased cars. The passenger automobile 

limits generally do not apply to passenger automobiles 

leased or held for leasing by anyone regularly engaged in 

the business of leasing passenger automobiles. For information on when you are considered regularly engaged in 

the business of leasing listed property, including passenger automobiles, see Exception for leased property, earlier, under What Is the Business-Use Requirement.

Publication 946 (2023) Chapter 5 Additional Rules for Listed Property 57
Maximum Depreciation Deduction

The passenger automobile limits are the maximum depreciation amounts you can deduct for a passenger automobile. They are based on the date you placed the 

automobile in service.

Passenger Automobiles

The maximum deduction amounts for most passenger automobiles are shown in the following table.

Maximum Depreciation Deduction for Passenger Automobiles (Including Trucks and Vans) Acquired After September 27, 2017, and Placed in Service Before 

2024

Date 4th &

Placed 1st 2nd 3rd Later

in Service Year Year Year Year

2023 $20,200 1 $19,500 $11,700 $6,960

2022 $19,2002 $18,000 $10,800 $6,460

2021 $18,2003 $16,400 $9,800 $5,860

2020 $18,1004 $16,100 $9,700 $5,760

2019 $18,1004 $16,100 $9,700 $5,760

2018 $18,0005 $16,000 $9,600 $5,760

1

If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum depreciation 

deduction is $12,200. 

2

If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum depreciation 

deduction is $11,200.

3

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum depreciation 

deduction is $10,200.

4

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum depreciation 

deduction is $10,100. 

5

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum depreciation 

deduction is $10,000.

Maximum Depreciation Deduction for Passenger Automobiles (Including Trucks and Vans) Acquired Before September 28, 2017, and Placed in Service Before 2020

Date 4th &

Placed 1st 2nd 3rd Later

in Service Year Year Year Year

2019 $14,9001 $16,100 $9,700 $5,760

2018 $16,4002 $16,000 $9,600 $5,760

1

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum depreciation 

deduction is $10,100. 

2

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum depreciation 

deduction is $10,000.

Maximum Depreciation Deduction for Passenger Automobiles Placed in Service Before 2018

Date 4th &

Placed 1st 2nd 3rd Later

in Service Year Year Year Years

2017 $11,1601 $5,100 $3,050 $1,875

2016 11,1601 5,100 3,050 1,875

2015 11,1602 5,100 3,050 1,875

2014 11,1603 5,100 3,050 1,875

2013 11,1603 5,100 3,050 1,875

2012 11,1603 5,100 3,050 1,875

2011 11,0604 4,900 2,950 1,775

 2010 11,0604 4,900 2,950 1,775

2009 10,9605 4,800 2,850 1,775

2008 10,9605 4,800 2,850 1,775

2007   3,060 4,900 2,850 1,775

2006   2,960 4,800 2,850 1,775

1

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,160. 

2

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,160. Also, if you placed the vehicle in service in a tax year 

beginning in 2015 and ending in 2016, and you elected to 

accelerate certain credits in lieu of the special depreciation for 

that tax year, the maximum deduction is $3,160.

3

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,160.

4

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,060.

5

 If you elected not to claim any special depreciation allowance 

for the vehicle or the vehicle is not qualified property, the 

maximum deduction is $2,960. 

If your business/investment use of the automobile 

is less than 100%, you must reduce the maximum 

deduction amount by multiplying the maximum 

amount by the percentage of business/investment use determined on an annual basis during the tax year.

If you have a short tax year, you must reduce the 

maximum deduction amount by multiplying the 

maximum amount by a fraction. The numerator of 

the fraction is the number of months and partial months in 

the short tax year, and the denominator is 12.

Example. On April 15, 2023, you bought and placed in 

service a new car for $14,500. You used the car only in 

your business. You file your tax return based on the calendar year. You do not elect a section 179 deduction and 

elected not to claim any special depreciation allowance for 

CAUTION

!

CAUTION

!

58 Chapter 5 Additional Rules for Listed Property Publication 946 (2023)
the 5-year property. Under MACRS, a car is 5-year property. Because you placed your car in service on April 15 

and used it only for business, you use the percentages in 

Table A-1 to figure your MACRS depreciation on the car. 

You multiply the $14,500 unadjusted basis of your car by 

0.20 to get your MACRS depreciation of $2,900 for 2023. 

This $2,900 is below the maximum depreciation deduction 

of $12,200 for passenger automobiles placed in service in 

2023. You can deduct the full $2,900.

Electric Vehicles

The maximum depreciation deductions for passenger automobiles that are produced to run primarily on electricity 

are higher than those for other automobiles. The maximum deduction amounts for electric vehicles placed in 

service after August 5, 1997, and before January 1, 2007, 

are shown in the following table. Owners of electric vehicles placed in service after December 31, 2006, should 

use the table of maximum deduction amounts in the previous section titled Passenger Automobiles for electric vehicles classified as passenger automobiles or use the table 

of maximum deduction amounts for trucks and vans, later, 

for electric vehicles classified as trucks and vans.

Maximum Depreciation Deduction

for Electric Vehicles

Date 4th &

 Placed 1st 2nd 3rd Later

in Service Year Year Year Years

2006 $8,980 $14,400 $8,650 $5,225

2005 8,880 14,200 8,450 5,125

2004 31,8301 14,300 8,550 5,125

5/06/2003–

12/31/2003

32,0302 14,600 8,750 5,225

1/01/2003–

5/05/2003

22,8803 14,600 8,750 5,225

1

 If you elected not to claim any special depreciation allowance 

for the vehicle or the vehicle is not qualified property, or the 

vehicle is qualified Liberty Zone property, the maximum 

deduction is $8,880.

2

 If you acquired the vehicle before 5/06/03, the maximum 

deduction is $22,880. If you elected not to claim any special 

depreciation allowance for the vehicle, the vehicle is not qualified 

property, or the vehicle is qualified Liberty Zone property, the 

maximum deduction is $9,080. 

3

 If you elected not to claim any special depreciation allowance 

for the vehicle, the vehicle is not qualified property, or the vehicle 

is qualified Liberty Zone property, the maximum deduction is 

$9,080. 

Trucks and Vans

The maximum depreciation deductions for trucks and 

vans placed in service after 2002 are higher than those for 

other passenger automobiles. The maximum deduction 

amounts for trucks and vans are shown in the following table.

Maximum Depreciation Deduction

for Trucks and Vans Placed in Service Before 2018

Date 4th &

 Placed 1st 2nd 3rd Later

in Service Year Year Year Years

2017 $11,5601 $5,700 $3,450 $2,075

2016 11,5601 5,700 3,350 2,075

2015 11,4602 5,600 3,350 1,975

2014 11,4603 5,500 3,350 1,975

2013 11,3604 5,400 3,250 1,975

2012 11,3604 5,300 3,150 1,875

2011 11,2605 5,200 3,150 1,875

2010 11,1606 5,100 3,050 1,875

2009 11,0607 4,900 2,950 1,775

2008 11,1608 5,100 3,050 1,875

2007 3,260 5,200 3,050 1,875

2006 3,260 5,200 3,150 1,875

1

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,560.

2

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,460. Also, if you placed the vehicle in service in a tax year 

beginning in 2015 and ending in 2016, and you elected to 

accelerate certain credits in lieu of the special depreciation for 

that tax year, the maximum deduction is $3,460. 

3

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,460.

4

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,360.

5

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,260.

6

 If you elected not to claim any special depreciation allowance or 

the vehicle is not qualified property, the maximum deduction is 

$3,160.

7

 If you elected not to claim any special depreciation allowance 

for the vehicle or the vehicle is not qualified property, the 

maximum deduction is $3,060.

8

 If you elected not to claim any special depreciation allowance 

for the vehicle or the vehicle is not qualified property, the 

maximum deduction is $3,160.

Publication 946 (2023) Chapter 5 Additional Rules for Listed Property 59
Depreciation Worksheet for

Passenger Automobiles

You can use the following worksheet to figure your depreciation deduction using the percentage tables. Then, use 

the information from this worksheet to prepare Form 4562.

Depreciation Worksheet for

Passenger Automobiles 

Keep for Your Records

Part I 

1. MACRS system (GDS or 

ADS) .......................

2. Property class ..............

3. Date placed in service .......

4. Recovery period ............

5. Method and convention ......

6. Depreciation rate (from 

tables) .....................

7. Maximum depreciation 

deduction for this year from the 

appropriate table ............

8. Business/investment-use 

percentage .................

9. Multiply line 7 by line 8. This is 

your adjusted maximum 

depreciation deduction ......

10. Section 179 deduction claimed 

this year (not more than line 9). 

Enter -0- if this is not the year 

you placed the car in 

service .....................

Note. 

1) If line 10 is equal to line 9, stop here. Your 

combined section 179 and depreciation 

deduction (including your special depreciation 

allowance) is limited to the amount on line 9. 

2) If line 10 is less than line 9, complete Part II.

Part II 

11. Subtract line 10 from line 9. 

This is the limit on the amount 

you can deduct for 

depreciation (including any 

special depreciation 

allowance) ..................

12. Cost or other basis (reduced by 

any alternative motor vehicle 

credit1 or credit for electric 

vehicles2) ...................

13. Multiply line 12 by line 8. This 

is your business/investment 

cost ........................

14. Section 179 deduction claimed 

in the year you placed the car 

in service ...................

15. Subtract line 14 from line 13. 

This is your tentative basis for 

depreciation ................

16. Multiply line 15 by the 

applicable percentage if the 

special depreciation allowance 

applies. This is your special 

depreciation allowance. 

Enter -0- if this is not the year 

you placed the car in service, 

the car is not qualified property, 

or you elected not to claim a 

special depreciation 

allowance ..................

Note.

1) If line 16 is equal to line 11, stop here. Your 

depreciation deduction (including your special 

depreciation allowance) is limited to the amount on 

line 11. 

2) If line 16 is less than line 11, complete Part III.

Part III

17. Subtract line 16 from line 11. 

This is the limit on the amount 

you can deduct for MACRS 

depreciation ................

18. Subtract line 16 from line 15. 

This is your basis for 

depreciation ................

19. Multiply line 18 by line 6. This 

is your tentative MACRS 

depreciation deduction ......

20. Enter the lesser of line 17 or 

line 19. This is your MACRS 

depreciation deduction ......

1

 When figuring the amount to enter on line 12, do not reduce 

your cost or other basis by any section 179 deduction you 

claimed for your car.

2

 Reduce the basis by the lesser of $4,000 or 10% of the cost 

of the vehicle even if the credit is less than that amount.

Deductions After the Recovery Period

If the depreciation deductions for your automobile are reduced under the passenger automobile limits, you will 

have unrecovered basis in your automobile at the end of 

the recovery period. If you continue to use the automobile 

for business, you can deduct that unrecovered basis after 

the recovery period ends. You can claim a depreciation 

deduction in each succeeding tax year until you recover 

your full basis in the car. The maximum amount you can 

deduct each year is determined by the date you placed 

the car in service and your business/investment-use 

60 Chapter 5 Additional Rules for Listed Property Publication 946 (2023)
percentage. See Maximum Depreciation Deduction, earlier.

Unrecovered basis is the cost or other basis of the passenger automobile reduced by any clean-fuel vehicle deduction, electric vehicle credit, depreciation, and section 

179 deductions that would have been allowable if you had 

used the car 100% for business and investment use and 

the passenger automobile limits had not applied.

You cannot claim a depreciation deduction for listed property other than passenger automobiles 

after the recovery period ends. There is no unrecovered basis at the end of the recovery period because 

you are considered to have used this property 100% for 

business and investment purposes during all of the recovery period.

Example. In May 2017, you bought and placed in 

service a car costing $31,500. The car was 5-year property under GDS (MACRS). You did not elect a section 179 

deduction and elected not to claim any special depreciation allowance for the 5-year property. You used the car 

exclusively for business during the recovery period (2017 

through 2022). You figured your depreciation as shown 

below.

Year Percentage Amount Limit Allowed

2017 20.0% $6,300 $3,160 $3,160

2018 32.0 10,080 5,100 5,100

2019 19.2 6,048 3,050 3,050

2020 11.52 3,629 1,875 1,875

2021 11.52 3,629 1,875 1,875

2022 5.76 1,814 1,875 1,875

Total............................ $16,935

At the end of 2022 you had an unrecovered basis of 

$14,565 ($31,500 − $16,935). If in 2023 and later years 

you continue to use the car 100% for business, you can 

deduct each year the lesser of $1,875 or your remaining 

unrecovered basis.

If your business use of the car had been less than 

100% during any year, your depreciation deduction would 

have been less than the maximum amount allowable for 

that year. However, in figuring your unrecovered basis in 

the car, you would still reduce your basis by the maximum 

amount allowable as if the business use had been 100%. 

For example, if you had used your car 60% for business 

instead of 100%, your allowable depreciation deductions 

would have been $8,739 ($14,565 × 60% (0.60)), but you 

would still have to reduce your basis by $14,565 to determine your unrecovered basis.

Deductions for Passenger 

Automobiles Acquired in a Trade-In

If you acquire a passenger automobile in a trade-in, depreciate the carryover basis separately as if the trade-in 

did not occur. Depreciate the part of the new automobile's 

basis that exceeds its carryover basis (excess basis) as if 

it were newly placed in service property. This excess basis 

CAUTION

!

is the additional cash paid for the new automobile in the 

trade-in.

The depreciation figured for the two components of the 

basis (carryover basis and excess basis) is subject to a 

single passenger automobile limit. Special rules apply in 

determining the passenger automobile limits. These rules 

and examples are discussed in section 1.168(i)-6(d)(3) of 

the regulations.

Instead of figuring depreciation for the carryover basis 

and the excess basis separately, you can elect to treat the 

old automobile as disposed of and both of the basis components for the new automobile as if placed in service at 

the time of the trade-in. For more information, including 

how to make this election, see Election out under Property 

Acquired in a Like-Kind Exchange or Involuntary Conversion in chapter 4, and sections 1.168(i)-6(i) and 

1.168(i)-6(j) of the regulations.

Like-kind exchanges completed after December 

31, 2017, are generally limited to exchanges of 

real property not held primarily for sale. Section 

1.168(i)-6 of the regulations does not reflect this change in 

law.

What Records Must Be Kept?

Terms you may need to know 

(see Glossary):

Business/investment use

Circumstantial evidence

Documentary evidence

You cannot take any depreciation or section 179 deduction for the use of listed property unless you can prove 

your business/investment use with adequate records or 

with sufficient evidence to support your own statements. 

For listed property, you must keep records for as long as 

any recapture can still occur. Recapture can occur in any 

tax year of the recovery period.

Adequate Records

To meet the adequate records requirement, you 

must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or 

other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. You do not have to record information in an 

account book, diary, or similar record if the information is 

already shown on the receipt. However, your records 

should back up your receipts in an orderly manner.

CAUTION

!

RECORDS

Publication 946 (2023) Chapter 5 Additional Rules for Listed Property 61
Elements of expenditure or use. Your records or other 

documentary evidence must support all the following.

• The amount of each separate expenditure, such as 

the cost of acquiring the item, maintenance and repair 

costs, capital improvement costs, lease payments, 

and any other expenses.

• The amount of each business and investment use 

(based on an appropriate measure, such as mileage 

for vehicles and time for other listed property), and the 

total use of the property for the tax year.

• The date of the expenditure or use.

• The business or investment purpose for the expenditure or use.

Written documents of your expenditure or use are generally better evidence than oral statements alone. You do 

not have to keep a daily log. However, some type of record 

containing the elements of an expenditure or the business 

or investment use of listed property made at or near the 

time of the expenditure or use and backed up by other 

documents is preferable to a statement you prepare later.

Timeliness. You must record the elements of an expenditure or use at the time you have full knowledge of the elements. An expense account statement made from an account book, diary, or similar record prepared or 

maintained at or near the time of the expenditure or use is 

generally considered a timely record if, in the regular 

course of business:

• The statement is given by an employee to the employer, or

• The statement is given by an independent contractor 

to the client or customer.

For example, a log maintained on a weekly basis, that 

accounts for use during the week, will be considered a record made at or near the time of use.

Business purpose supported. Generally, an adequate 

record of business purpose must be in the form of a written statement. However, the amount of detail necessary to 

establish a business purpose depends on the facts and 

circumstances of each case. A written explanation of the 

business purpose will not be required if the purpose can 

be determined from the surrounding facts and circumstances. For example, a salesperson visiting customers on an 

established sales route will not normally need a written explanation of the business purpose of their travel.

Business use supported. An adequate record contains 

enough information on each element of every business or 

investment use. The amount of detail required to support 

the use depends on the facts and circumstances. For example, a taxpayer who uses a truck for both business and 

personal purposes and whose only business use of the 

truck is to make customer deliveries on an established 

route can satisfy the requirement by recording the length 

of the route, including the total number of miles driven during the tax year and the date of each trip at or near the 

time of the trip.

Although you must generally prepare an adequate written record, you can prepare a record of the business use 

of listed property in a computer memory device that uses 

a logging program.

Separate or combined expenditures or uses. Each 

use by you is normally considered a separate use. However, you can combine repeated uses as a single item.

Record each expenditure as a separate item. Do not 

combine it with other expenditures. If you choose, however, you can combine amounts you spent for the use of 

listed property during a tax year, such as for gasoline or 

automobile repairs. If you combine these expenses, you 

do not need to support the business purpose of each expense. Instead, you can divide the expenses based on the 

total business use of the listed property.

You can account for uses that can be considered part 

of a single use, such as a round trip or uninterrupted business use, by a single record. For example, you can account for the use of a truck to make deliveries at several 

locations that begin and end at the business premises and 

can include a stop at the business in between deliveries 

by a single record of miles driven. You can account for the 

use of a passenger automobile by a salesperson for a 

business trip away from home over a period of time by a 

single record of miles traveled. Minimal personal use 

(such as a stop for lunch between two business stops) is 

not an interruption of business use.

Confidential information. If any of the information on 

the elements of an expenditure or use is confidential, you 

do not need to include it in the account book or similar record if you record it at or near the time of the expenditure 

or use. You must keep it elsewhere and make it available 

as support to the IRS director for your area on request.

Substantial compliance. If you have not fully supported 

a particular element of an expenditure or use, but have 

complied with the adequate records requirement for the 

expenditure or use to the satisfaction of the IRS director 

for your area, you can establish this element by any evidence the IRS director for your area deems adequate.

If you fail to establish to the satisfaction of the IRS director for your area that you have substantially complied 

with the adequate records requirement for an element of 

an expenditure or use, you must establish the element as 

follows.

• By your own oral or written statement containing detailed information as to the element.

• By other evidence sufficient to establish the element.

If the element is the cost or amount, time, place, or date 

of an expenditure or use, its supporting evidence must be 

direct evidence, such as oral testimony by witnesses or a 

written statement setting forth detailed information about 

the element or the documentary evidence. If the element 

is the business purpose of an expenditure, its supporting 

evidence can be circumstantial evidence.

Sampling. You can maintain an adequate record for part 

of a tax year and use that record to support your business 

and investment use of listed property for the entire tax 

62 Chapter 5 Additional Rules for Listed Property Publication 946 (2023)
year if it can be shown by other evidence that the periods 

for which you maintain an adequate record are representative of the use throughout the year.

Example 1. You are a sole proprietor and calendar 

year taxpayer who operates an interior decorating business out of your home. You use your automobile for local 

business visits to the homes or offices of clients, for meetings with suppliers and subcontractors, and to pick up and 

deliver items to clients. There is no other business use of 

the automobile, but you and family members also use it for 

personal purposes. You maintain adequate records for the 

first 3 months of the year showing that 75% of the automobile use was for business. Subcontractor invoices and 

paid bills show that your business continued at approximately the same rate for the rest of the year. If there is no 

change in circumstances, such as the purchase of a second car for exclusive use in your business, the determination that your combined business/investment use of the 

automobile for the tax year is 75% rests on sufficient supporting evidence.

Example 2. Assume the same facts as in Example 1, 

except that you maintain adequate records during the first 

week of every month showing that 75% of your use of the 

automobile is for business. Your business invoices show 

that your business continued at the same rate during the 

later weeks of each month so that your weekly records are 

representative of the automobile's business use throughout the month. The determination that your business/

investment use of the automobile for the tax year is 75% 

rests on sufficient supporting evidence.

Example 3. You are a sole proprietor and calendar 

year taxpayer who works as a sales representative in a 

large metropolitan area for a company that manufactures 

household products. For the first 3 weeks of each month, 

you occasionally used your own automobile for business 

travel within the metropolitan area. During these weeks, 

your business use of the automobile does not follow a 

consistent pattern. During the fourth week of each month, 

you delivered all business orders taken during the previous month. The business use of your automobile, as supported by adequate records, is 70% of its total use during 

that fourth week. The determination based on the record 

maintained during the fourth week of the month that your 

business/investment use of the automobile for the tax year 

is 70% does not rest on sufficient supporting evidence because your use during that week is not representative of 

use during other periods.

Loss of records. When you establish that failure to produce adequate records is due to loss of the records 

through circumstances beyond your control, such as 

through fire, flood, earthquake, or other casualty, you have 

the right to support a deduction by reasonable reconstruction of your expenditures and use.

How Is Listed Property 

Information Reported?

You must provide the information about your listed property requested in Section A of Part V of Form 4562, if you 

claim either of the following deductions.

• Any deduction for a vehicle.

• A depreciation deduction for any other listed property.

If you claim any deduction for a vehicle, you must also provide the information requested in Section B. If you provide 

the vehicle for your employee's use, the employee must 

give you this information. If you provide any vehicle for use 

by an employee, you must first answer the questions in 

Section C to see if you meet an exception to completing 

Section B for that vehicle.

Vehicles used by your employees. You do not have to 

complete Section B of Part V, for vehicles used by your 

employees who are not more-than-5% owners or related 

persons if you meet at least one of the following requirements.

1. You maintain a written policy statement that prohibits 

one of the following uses of the vehicles.

a. All personal use, including commuting.

b. Personal use, other than commuting, by employees who are not officers, directors, or 1%-or-more 

owners.

2. You treat all use of the vehicles by your employees as 

personal use.

3. You provide more than five vehicles for use by your 

employees, and you keep in your records the information on their use given to you by the employees.

4. For demonstrator automobiles provided to full-time 

salespersons, you maintain a written policy statement 

that limits the total mileage outside the salesperson's 

normal working hours and prohibits use of the automobile by anyone else, for vacation trips, or to store 

personal possessions.

Exceptions. If you file Form 2106, and you are not required to file Form 4562, report information about listed 

property on that form and not on Form 4562. Also, if you 

file Schedule C (Form 1040) and are claiming the standard mileage rate or actual vehicle expenses (except depreciation) and you are not required to file Form 4562 for 

any other reason, report vehicle information in Part IV of 

Schedule C and not on Form 4562.

How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, 

Publication 946 (2023) 63
forms, or instructions, go to IRS.gov to find resources that 

can help you right away.

Preparing and filing your tax return. After receiving all 

your wage and earnings statements (Forms W-2, W-2G, 

1099-R, 1099-MISC, 1099-NEC, etc.); unemployment 

compensation statements (by mail or in a digital format) or 

other government payment statements (Form 1099-G); 

and interest, dividend, and retirement statements from 

banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you 

qualify for free tax preparation, or hire a tax professional to 

prepare your return.

Free options for tax preparation. Your options for preparing and filing your return online or in your local community, if you qualify, include the following.

• Free File. This program lets you prepare and file your 

federal individual income tax return for free using software or Free File Fillable Forms. However, state tax 

preparation may not be available through Free File. Go 

to IRS.gov/FreeFile to see if you qualify for free online 

federal tax preparation, e-filing, and direct deposit or 

payment options.

• VITA. The Volunteer Income Tax Assistance (VITA) 

program offers free tax help to people with 

low-to-moderate incomes, persons with disabilities, 

and limited-English-speaking taxpayers who need 

help preparing their own tax returns. Go to IRS.gov/

VITA, download the free IRS2Go app, or call 

800-906-9887 for information on free tax return preparation.

• TCE. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly 

those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors. 

Go to IRS.gov/TCE, or download the free IRS2Go app 

for information on free tax return preparation.

• MilTax. Members of the U.S. Armed Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military 

OneSource. For more information, go to 

MilitaryOneSource (MilitaryOneSource.mil/MilTax).

Also, the IRS offers Free Fillable Forms, which can 

be completed online and then e-filed regardless of income.

Using online tools to help prepare your return. Go to 

IRS.gov/Tools for the following.

• The Earned Income Tax Credit Assistant (IRS.gov/

EITCAssistant) determines if you’re eligible for the 

earned income credit (EIC).

• The Online EIN Application (IRS.gov/EIN) helps you 

get an employer identification number (EIN) at no 

cost.

• The Tax Withholding Estimator (IRS.gov/W4app) 

makes it easier for you to estimate the federal income 

tax you want your employer to withhold from your paycheck. This is tax withholding. See how your withholding affects your refund, take-home pay, or tax due.

• The First-Time Homebuyer Credit Account Look-up 

(IRS.gov/HomeBuyer) tool provides information on 

your repayments and account balance.

• The Sales Tax Deduction Calculator (IRS.gov/

SalesTax) figures the amount you can claim if you 

itemize deductions on Schedule A (Form 1040).

Getting answers to your tax questions. On 

IRS.gov, you can get up-to-date information on 

current events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you get answers to some of the most common tax questions.

• IRS.gov/ITA: The Interactive Tax Assistant, a tool that 

will ask you questions and, based on your input, provide answers on a number of tax topics.

• IRS.gov/Forms: Find forms, instructions, and publications. You will find details on the most recent tax 

changes and interactive links to help you find answers 

to your questions.

• You may also be able to access tax information in your 

e-filing software.

Need someone to prepare your tax return? There are 

various types of tax return preparers, including enrolled 

agents, certified public accountants (CPAs), accountants, 

and many others who don’t have professional credentials. 

If you choose to have someone prepare your tax return, 

choose that preparer wisely. A paid tax preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification 

number (PTIN).

Although the tax preparer always signs the return, 

you're ultimately responsible for providing all the 

information required for the preparer to accurately 

prepare your return and for the accuracy of every item reported on the return. Anyone paid to prepare tax returns 

for others should have a thorough understanding of tax 

matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov.

Employers can register to use Business Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure 

online W-2 filing options to CPAs, accountants, enrolled 

agents, and individuals who process Form W-2, Wage 

and Tax Statement, and Form W-2c, Corrected Wage and 

Tax Statement.

IRS social media. Go to IRS.gov/SocialMedia to see the 

various social media tools the IRS uses to share the latest 

information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our 

CAUTION

!

64 Publication 946 (2023)
highest priority. We use these tools to share public information with you. Don’t post your social security number 

(SSN) or other confidential information on social media 

sites. Always protect your identity when using any social 

networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, 

Spanish, and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosmultilingua.

• Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal 

(IRSVideos.gov) contains video and audio presentations 

for individuals, small businesses, and tax professionals.

Online tax information in other languages. You can 

find information on IRS.gov/MyLanguage if English isn’t 

your native language.

Free Over-the-Phone Interpreter (OPI) Service. The 

IRS is committed to serving taxpayers with limited-English-proficiency (LEP) by offering OPI services. The OPI 

Service is a federally funded program and is available at 

Taxpayer Assistance Centers (TACs), most IRS offices, 

and every VITA/TCE tax return site. The OPI Service is accessible in more than 350 languages.

Accessibility Helpline available for taxpayers with 

disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and 

future accessibility products and services available in alternative media formats (for example, braille, large print, 

audio, etc.). The Accessibility Helpline does not have access to your IRS account. For help with tax law, refunds, or 

account-related issues, go to IRS.gov/LetUsHelp.

Note. Form 9000, Alternative Media Preference, or 

Form 9000(SP) allows you to elect to receive certain types 

of written correspondence in the following formats.

• Standard Print.

• Large Print.

• Braille.

• Audio (MP3).

• Plain Text File (TXT).

• Braille Ready File (BRF).

Disasters. Go to IRS.gov/DisasterRelief to review the 

available disaster tax relief.

Getting tax forms and publications. Go to IRS.gov/

Forms to view, download, or print all the forms, instructions, and publications you may need. Or, you can go to 

IRS.gov/OrderForms to place an order.

Getting tax publications and instructions in eBook 

format. Download and view most tax publications and instructions (including the Instructions for Form 1040) on 

mobile devices as eBooks at IRS.gov/eBooks.

IRS eBooks have been tested using Apple's iBooks for 

iPad. Our eBooks haven’t been tested on other dedicated 

eBook readers, and eBook functionality may not operate 

as intended.

Access your online account (individual taxpayers 

only). Go to IRS.gov/Account to securely access information about your federal tax account.

• View the amount you owe and a breakdown by tax 

year.

• See payment plan details or apply for a new payment 

plan.

• Make a payment or view 5 years of payment history 

and any pending or scheduled payments.

• Access your tax records, including key data from your 

most recent tax return, and transcripts.

• View digital copies of select notices from the IRS.

• Approve or reject authorization requests from tax professionals.

• View your address on file or manage your communication preferences.

Get a transcript of your return. With an online account, 

you can access a variety of information to help you during 

the filing season. You can get a transcript, review your 

most recently filed tax return, and get your adjusted gross 

income. Create or access your online account at IRS.gov/

Account.

Tax Pro Account. This tool lets your tax professional 

submit an authorization request to access your individual 

taxpayer IRS online account. For more information, go to 

IRS.gov/TaxProAccount.

Using direct deposit. The safest and easiest way to receive a tax refund is to e-file and choose direct deposit, 

which securely and electronically transfers your refund directly into your financial account. Direct deposit also 

avoids the possibility that your check could be lost, stolen, 

destroyed, or returned undeliverable to the IRS. Eight in 

10 taxpayers use direct deposit to receive their refunds. If 

you don’t have a bank account, go to IRS.gov/

DirectDeposit for more information on where to find a bank 

or credit union that can open an account online.

Reporting and resolving your tax-related identity 

theft issues. 

• Tax-related identity theft happens when someone 

steals your personal information to commit tax fraud. 

Your taxes can be affected if your SSN is used to file a 

fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by 

email, text messages (including shortened links), telephone calls, or social media channels to request or 

verify personal or financial information. This includes 

requests for personal identification numbers (PINs), 

Publication 946 (2023) 65
passwords, or similar information for credit cards, 

banks, or other financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft 

Central webpage, for information on identity theft and 

data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or 

stolen or you suspect you’re a victim of tax-related 

identity theft, you can learn what steps you should 

take.

• Get an Identity Protection PIN (IP PIN). IP PINs are 

six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your 

SSN. To learn more, go to IRS.gov/IPPIN.

Ways to check on the status of your refund. 

• Go to IRS.gov/Refunds.

• Download the official IRS2Go app to your mobile device to check your refund status.

• Call the automated refund hotline at 800-829-1954.

The IRS can’t issue refunds before mid-February 

for returns that claimed the EIC or the additional 

child tax credit (ACTC). This applies to the entire 

refund, not just the portion associated with these credits.

Making a tax payment. Payments of U.S. tax must be 

remitted to the IRS in U.S. dollars. Digital assets are not 

accepted. Go to IRS.gov/Payments for information on how 

to make a payment using any of the following options.

• IRS Direct Pay: Pay your individual tax bill or estimated 

tax payment directly from your checking or savings account at no cost to you.

• Debit Card, Credit Card, or Digital Wallet: Choose an 

approved payment processor to pay online or by 

phone.

• Electronic Funds Withdrawal: Schedule a payment 

when filing your federal taxes using tax return preparation software or through a tax professional.

• Electronic Federal Tax Payment System: Best option 

for businesses. Enrollment is required.

• Check or Money Order: Mail your payment to the address listed on the notice or instructions.

• Cash: You may be able to pay your taxes with cash at 

a participating retail store.

• Same-Day Wire: You may be able to do same-day 

wire from your financial institution. Contact your financial institution for availability, cost, and time frames.

Note. The IRS uses the latest encryption technology to 

ensure that the electronic payments you make online, by 

phone, or from a mobile device using the IRS2Go app are 

safe and secure. Paying electronically is quick, easy, and 

faster than mailing in a check or money order.

CAUTION

!

What if I can’t pay now? Go to IRS.gov/Payments for 

more information about your options.

• Apply for an online payment agreement (IRS.gov/

OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once 

you complete the online process, you will receive immediate notification of whether your agreement has 

been approved.

• Use the Offer in Compromise Pre-Qualifier to see if 

you can settle your tax debt for less than the full 

amount you owe. For more information on the Offer in 

Compromise program, go to IRS.gov/OIC.

Filing an amended return. Go to IRS.gov/Form1040X 

for information and updates.

Checking the status of your amended return. Go to 

IRS.gov/WMAR to track the status of Form 1040-X amended returns.

It can take up to 3 weeks from the date you filed 

your amended return for it to show up in our system, and processing it can take up to 16 weeks.

Understanding an IRS notice or letter you’ve received. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

Responding to an IRS notice or letter. You can now 

upload responses to all notices and letters using the 

Document Upload Tool. For notices that require additional 

action, taxpayers will be redirected appropriately on 

IRS.gov to take further action. To learn more about the 

tool, go to IRS.gov/Upload.

Note. You can use Schedule LEP (Form 1040), Request for Change in Language Preference, to state a preference to receive notices, letters, or other written communications from the IRS in an alternative language. You may 

not immediately receive written communications in the requested language. The IRS’s commitment to LEP taxpayers is part of a multi-year timeline that began providing 

translations in 2023. You will continue to receive communications, including notices and letters, in English until they 

are translated to your preferred language.

Contacting your local TAC. Keep in mind, many questions can be answered on IRS.gov without visiting a TAC. 

Go to IRS.gov/LetUsHelp for the topics people ask about 

most. If you still need help, TACs provide tax help when a 

tax issue can’t be handled online or by phone. All TACs 

now provide service by appointment, so you’ll know in advance that you can get the service you need without long 

wait times. Before you visit, go to IRS.gov/TACLocator to 

find the nearest TAC and to check hours, available services, and appointment options. Or, on the IRS2Go app, 

under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

CAUTION

!

66 Publication 946 (2023)
The Taxpayer Advocate Service (TAS) 

Is Here To Help You

What Is TAS?

TAS is an independent organization within the IRS that 

helps taxpayers and protects taxpayer rights. TAS strives 

to ensure that every taxpayer is treated fairly and that you 

know and understand your rights under the Taxpayer Bill 

of Rights.

How Can You Learn About Your Taxpayer 

Rights?

The Taxpayer Bill of Rights describes 10 basic rights that 

all taxpayers have when dealing with the IRS. Go to 

TaxpayerAdvocate.IRS.gov to help you understand what 

these rights mean to you and how they apply. These are 

your rights. Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you can’t resolve 

with the IRS. And their service is free. If you qualify for 

their assistance, you will be assigned to one advocate 

who will work with you throughout the process and will do 

everything possible to resolve your issue. TAS can help 

you if:

• Your problem is causing financial difficulty for you, 

your family, or your business;

• You face (or your business is facing) an immediate 

threat of adverse action; or

• You’ve tried repeatedly to contact the IRS but no one 

has responded, or the IRS hasn’t responded by the 

date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, 

and Puerto Rico. To find your advocate’s number:

• Go to TaxpayerAdvocate.IRS.gov/Contact-Us;

• Download Pub. 1546, The Taxpayer Advocate Service 

Is Your Voice at the IRS, available at IRS.gov/pub/irspdf/p1546.pdf

• Call the IRS toll free at 800-TAX-FORM 

(800-829-3676) to order a copy of Pub. 1546;

• Check your local directory; or

• Call TAS toll free at 877-777-4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect 

many taxpayers. If you know of one of these broad issues, 

report it to TAS at IRS.gov/SAMS. Be sure to not include 

any personal taxpayer information.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level 

and who need to resolve tax problems with the IRS. LITCs 

can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, 

LITCs can provide information about taxpayer rights and 

responsibilities in different languages for individuals who 

speak English as a second language. Services are offered 

for free or a small fee. For more information or to find an 

LITC near you, go to the LITC page at 

TaxpayerAdvocate.IRS.gov/LITC or see IRS Pub. 4134, 

Low Income Taxpayer Clinic List, at IRS.gov/pub/irs-pdf/

p4134.pdf.

Publication 946 (2023) 67
Chart 1. Use this chart to find the correct percentage table to use for any property other than residential rental

and nonresidential real property. Use Chart 2 for residential rental and nonresidential real property.

MACRS

System

Depreciation

Method

Appendix A

MACRS Percentage Table Guide

General Depreciation System (GDS)

Alternative Depreciation System (ADS)

Recovery Period Convention Class

Month or

Quarter

Placed

in Service Table

GDS 200% GDS/3, 5, 7, 10 Half-Year 3, 5, 7, 10 Any A-1

GDS 200% GDS/3, 5, 7, 10 3, 5, 7, 10 1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

A-2

A-3

A-4

A-5

GDS 150% GDS/3, 5, 7, 10 Half-Year 3, 5, 7, 10 Any A-14

GDS 150% GDS/3, 5, 7, 10 Mid-Quarter 3, 5, 7, 10 1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

A-15

A-16

A-17

A-18

GDS 150% GDS/15, 20 Half-Year 15 & 20 Any A-1

GDS 150% GDS/15, 20 Mid-Quarter 15 & 20 1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

A-2

A-3

A-4

A-5

GDS

ADS

SL GDS

ADS

Half-Year Any Any A-8

GDS

ADS

SL GDS

ADS

Mid-Quarter Any 1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

A-9

A-10

A-11

A-12

ADS 150% ADS Half-Year Any Any A-14

ADS 150% ADS Mid-Quarter Any 1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

A-15

A-16

A-17

A-18

Chart 2. Use this chart to find the correct percentage table to use for residential rental and nonresidential real

property. Use Chart 1 for all other property.

MACRS

System

Depreciation

Method Recovery Period Convention Class

Month or

Quarter

Placed

in Service Table

GDS SL GDS/27.5 Mid-Month Residential Rental Any A-6

GDS SL

SL

GDS/31.5

GDS/39

Mid-Month Nonresidential Real Any A-7

A-7a

ADS SL ADS/30 Mid-Month Residential Rental Any A-13

Chart 3. Income Inclusion Amount Rates

for MACRS Leased Listed Property

Table

Amount A Percentages

Amount B Percentages

A-19

A-20

SL ADS/40 Mid-Month Residential Rental and Any A-13a

Nonresidential Real

Mid-Quarter

68 Publication 946 (2023)
Table A-1. 3-, 5-, 7-, 10-, 15-, and 20-Year Property

Half-Year Convention

Year

1

2

3

4

5

6

7

8

9

10

Depreciation rate for recovery period

3-year 5-year 7-year 10-year 15-year 20-year

11

12

13

14

15

16

17

18

19

20

21

33.33%

44.45

14.81

7.41

20.00%

32.00

19.20

11.52

11.52

5.76

14.29%

24.49

17.49

12.49

8.93

8.92

8.93

4.46

10.00%

18.00

14.40

11.52

9.22

7.37

6.55

6.55

6.56

6.55

3.28

5.00%

9.50

8.55

7.70

6.93

6.23

5.90

5.90

5.91

5.90

5.91

5.90

5.91

5.90

5.91

2.95

3.750%

7.219

6.677

6.177

5.713

5.285

4.888

4.522

4.462

4.461

4.462

4.461

4.462

4.461

4.462

4.461

4.462

4.461

4.462

4.461

2.231

Table A-2. 3-, 5-, 7-, 10-, 15-, and 20-Year Property

Mid-Quarter Convention

Placed in Service in First Quarter

Year

1

2

3

4

5

6

7

8

9

10

Depreciation rate for recovery period

3-year 5-year 7-year 10-year 15-year 20-year

11

12

13

14

15

16

17

18

19

20

21

58.33%

27.78

12.35

1.54

35.00%

26.00

15.60

11.01

11.01

1.38

25.00%

21.43

15.31

10.93

8.75

8.74

8.75

1.09

17.50%

16.50

13.20

10.56

8.45

6.76

6.55

6.55

6.56

6.55

0.82

8.75%

9.13

8.21

7.39

6.65

5.99

5.90

5.91

5.90

5.91

5.90

5.91

5.90

5.91

5.90

0.74

6.563%

7.000

6.482

5.996

5.546

5.130

4.746

4.459

4.459

4.459

4.459

4.460

4.459

4.460

4.459

4.460

4.459

4.460

4.459

4.460

0.565

Publication 946 (2023) 69
Table A-3. 3-, 5-, 7-, 10-, 15-, and 20-Year Property

Mid-Quarter Convention

Placed in Service in Second Quarter

Year

1

2

3

4

5

6

7

8

9

10

Depreciation rate for recovery period

3-year 5-year 7-year 10-year 15-year 20-year

11

12

13

14

15

16

17

18

19

20

21

41.67%

38.89

14.14

5.30

25.00%

30.00

18.00

11.37

11.37

4.26

17.85%

23.47

16.76

11.97

8.87

8.87

8.87

3.34

12.50%

17.50

14.00

11.20

8.96

7.17

6.55

6.55

6.56

6.55

2.46

6.25%

9.38

8.44

7.59

6.83

6.15

5.91

5.90

5.91

5.90

5.91

5.90

5.91

5.90

5.91

2.21

4.688%

7.148

6.612

6.116

5.658

5.233

4.841

4.478

4.463

4.463

4.463

4.463

4.463

4.463

4.462

4.463

4.462

4.463

4.462

4.463

1.673

Table A-4. 3-, 5-, 7-, 10-, 15-, and 20-Year Property

Mid-Quarter Convention

Placed in Service in Third Quarter

Year

1

2

3

4

5

6

7

8

9

10

Depreciation rate for recovery period

3-year 5-year 7-year 10-year 15-year 20-year

11

12

13

14

15

16

17

18

19

20

21

25.00%

50.00

16.67

8.33

15.00%

34.00

20.40

12.24

11.30

7.06

10.71%

25.51

18.22

13.02

9.30

8.85

8.86

5.53

7.50%

18.50

14.80

11.84

9.47

7.58

6.55

6.55

6.56

6.55

4.10

3.75%

9.63

8.66

7.80

7.02

6.31

5.90

5.90

5.91

5.90

5.91

5.90

5.91

5.90

5.91

3.69

2.813%

7.289

6.742

6.237

5.769

5.336

4.936

4.566

4.460

4.460

4.460

4.460

4.461

4.460

4.461

4.460

4.461

4.460

4.461

4.460

2.788

70 Publication 946 (2023)
Table A-5. 3-, 5-, 7-, 10-, 15-, and 20-Year Property

Mid-Quarter Convention

Placed in Service in Fourth Quarter

Year

1

2

3

4

5

6

7

8

9

10

Depreciation rate for recovery period

3-year 5-year 7-year 10-year 15-year 20-year

11

12

13

14

15

16

17

18

19

20

21

8.33%

61.11

20.37

10.19

5.00%

38.00

22.80

13.68

10.94

9.58

3.57%

27.55

19.68

14.06

10.04

8.73

8.73

7.64

2.50%

19.50

15.60

12.48

9.98

7.99

6.55

6.55

6.56

6.55

5.74

1.25%

9.88

8.89

8.00

7.20

6.48

5.90

5.90

5.90

5.91

5.90

5.91

5.90

5.91

5.90

5.17

0.938%

7.430

6.872

6.357

5.880

5.439

5.031

4.654

4.458

4.458

4.458

4.458

4.458

4.458

4.458

4.458

4.458

4.459

4.458

4.459

3.901

Table A-6. Residential Rental Property

Mid-Month Convention

Straight Line—27.5 Years

Year

1

2–9

10

11

12

13

14

15

16

17

Month property placed in service

7 8 9 10 11 12

18

19

20

21

22

23

24

25

26

27

28

29

0.152%

1 2 3 4 5 6

3.485% 3.182% 2.879% 2.576% 2.273% 1.970% 1.667% 1.364% 1.061% 0.758% 0.455%

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

1.97

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

2.273

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

2.576

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

2.879

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.182

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.485

3.636

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

0.152

3.636

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

0.455

3.636

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

0.758

3.636

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

1.061

3.636

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

1.364

3.636

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

3.637

3.636

1.667

Publication 946 (2023) 71
Table A-7. Nonresidential Real Property

Mid-Month Convention

Straight Line—31.5 Years

Year

1

2–7

8

9

10

11

12

13

14

15

Month property placed in service

7 8 9 10 11 12

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

1 2 3 4 5 6

3.042% 2.778% 2.513% 2.249% 1.984% 1.720% 1.455% 1.190% 0.926% 0.661% 0.397%

3.175

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

0.132%

31

32

33

3.174

1.720

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

1.984

3.175

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

2.249

3.175

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

2.778

3.175

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

0.132

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

2.513

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.042

3.175

3.175

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

0.397

3.175

3.175

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

0.926

3.175

3.175

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

1.455

3.175

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

0.661

3.175

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

3.174

3.175

1.190

Table A-7a. Nonresidential Real Property

Mid-Month Convention

Straight Line—39 Years

Year

1

2–39

40

Month property placed in service

1 2 3 4 5 6 7 8 9 10 11 12

2.461% 2.247% 2.033% 1.819% 1.605% 1.391% 1.177% 0.963% 0.749% 0.535% 0.321%

2.564

0.107

0.107%

2.564

0.321

2.564

0.535

2.564

0.963

2.564

1.391

2.564

0.749

2.564

1.177

2.564

1.605

2.564

2.033

2.564

2.461

2.564

1.819

2.564

2.247

72 Publication 946 (2023)
Table A-8. Straight Line Method

Half-Year Convention

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

2.5

20.0%

40.0

40.0

3

16.67%

33.33

33.33

16.67

3.5

14.29%

28.57

28.57

28.57

4

12.5%

25.0

25.0

25.0

12.5

5

10.0%

20.0

20.0

20.0

20.0

10.0

6

8.33%

16.67

16.67

16.67

16.66

16.67

8.33

6.5

7.69%

15.39

15.38

15.39

15.38

15.39

15.38

7

7.14%

14.29

14.29

14.28

14.29

14.28

14.29

7.14

7.5

6.67%

13.33

13.33

13.33

13.34

13.33

13.34

13.33

8

6.25%

12.50

12.50

12.50

12.50

12.50

12.50

12.50

6.25

8.5

5.88%

11.77

11.76

11.77

11.76

11.77

11.76

11.77

11.76

9

5.56%

11.11

11.11

11.11

11.11

11.11

11.11

11.11

11.11

5.56

9.5

5.26%

10.53

10.53

10.53

10.52

10.53

10.52

10.53

10.52

10.53

Table A-8. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10

5.0%

10.0

10.0

10.0

10.0

10.5

4.76%

9.52

9.52

9.53

9.52

11

4.55%

9.09

9.09

9.09

9.09

12

4.35%

8.70

8.70

8.69

8.70

12.5

4.17%

8.33

8.33

8.33

8.33

13

4.0%

8.0

8.0

8.0

8.0

13.5

3.85%

7.69

7.69

7.69

7.69

14

3.70%

7.41

7.41

7.41

7.41

15

3.57%

7.14

7.14

7.14

7.14

16

3.33%

6.67

6.67

6.67

6.67

16.5

3.13%

6.25

6.25

6.25

6.25

17

3.03%

6.06

6.06

6.06

6.06

11.5

2.94%

5.88

5.88

5.88

5.88

11

12

13

14

15

16

17

18

10.0

10.0

10.0

10.0

10.0

9.53

9.52

9.53

9.52

9.53

9.09

9.09

9.09

9.09

9.09

8.69

8.70

8.69

8.70

8.69

8.33

8.34

8.33

8.34

8.33

8.0

8.0

8.0

8.0

8.0

7.69

7.69

7.69

7.69

7.70

7.41

7.41

7.41

7.41

7.40

7.14

7.14

7.15

7.14

7.15

6.67

6.67

6.66

6.67

6.66

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.88

5.88

5.88

5.88

5.88

5.0 9.52 9.09

4.55

8.70

8.69

8.34

8.33

4.17

8.0

8.0

8.0

7.69

7.70

7.69

3.85

7.41

7.40

7.41

7.40

7.14

7.15

7.14

7.15

3.57

6.67

6.66

6.67

6.66

6.67

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.89

5.88

5.89

5.88

5.89

3.33 6.25

3.12

6.06

6.07

5.88

5.89

2.94

Publication 946 (2023) 73
Table A-8. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18

2.78%

5.56

5.56

5.55

5.56

19

2.63%

5.26

5.26

5.26

5.26

20

2.5%

5.0

5.0

5.0

5.0

24

2.273%

4.545

4.545

4.545

4.546

25

2.083%

4.167

4.167

4.167

4.167

26.5

2.0%

4.0

4.0

4.0

4.0

28

1.887%

3.774

3.774

3.774

3.774

30

1.786%

3.571

3.571

3.571

3.571

35

1.667%

3.333

3.333

3.333

3.333

40

1.429%

2.857

2.857

2.857

2.857

45

1.25%

2.50

2.50

2.50

2.50

50

1.111%

2.222

2.222

2.222

2.222

22

1.0%

2.0

2.0

2.0

2.0

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47–50

51

5.55

5.56

5.55

5.56

5.55

5.26

5.26

5.26

5.27

5.26

5.0

5.0

5.0

5.0

5.0

4.545

4.546

4.545

4.546

4.545

4.167

4.167

4.167

4.167

4.167

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.571

3.572

3.571

3.572

3.571

3.333

3.333

3.333

3.333

3.333

2.857

2.857

2.857

2.857

2.857

2.50

2.50

2.50

2.50

2.50

2.222

2.222

2.222

2.222

2.222

2.0

2.0

2.0

2.0

2.0

5.56

5.55

5.56

5.55

5.56

5.27

5.26

5.27

5.26

5.27

5.0

5.0

5.0

5.0

5.0

4.546

4.545

4.546

4.545

4.546

4.166

4.167

4.166

4.167

4.166

4.0

4.0

4.0

4.0

4.0

3.773

3.774

3.773

3.773

3.774

3.572

3.571

3.572

3.571

3.572

3.333

3.333

3.334

3.333

3.334

2.857

2.857

2.857

2.857

2.857

2.50

2.50

2.50

2.50

2.50

2.222

2.222

2.222

2.222

2.222

2.0

2.0

2.0

2.0

2.0

5.55

5.56

5.55

2.78

5.26

5.27

5.26

5.27

2.63

5.0

5.0

5.0

5.0

5.0

4.545

4.546

4.545

4.546

4.545

4.167

4.166

4.167

4.166

4.167

4.0

4.0

4.0

4.0

4.0

3.773

3.774

3.773

3.774

3.773

3.571

3.572

3.571

3.572

3.571

3.333

3.334

3.333

3.334

3.333

2.857

2.857

2.857

2.857

2.857

2.50

2.50

2.50

2.50

2.50

2.222

2.222

2.222

2.222

2.222

2.0

2.0

2.0

2.0

2.0

2.5 4.546

4.545

2.273

4.166

4.167

4.166

4.167

2.083

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.572

3.571

3.572

3.571

3.572

3.334

3.333

3.334

3.333

3.334

2.857

2.857

2.857

2.857

2.857

2.50

2.50

2.50

2.50

2.50

2.222

2.222

2.222

2.222

2.222

2.0

2.0

2.0

2.0

2.0

2.0 3.773

3.774

3.571

3.572

3.571

1.786

3.333

3.334

3.333

3.334

3.333

2.857

2.857

2.858

2.857

2.858

2.50

2.50

2.50

2.50

2.50

2.222

2.223

2.222

2.223

2.222

2.0

2.0

2.0

2.0

2.0

1.667 2.857

2.858

2.857

2.858

2.857

2.50

2.50

2.50

2.50

2.50

2.223

2.222

2.223

2.222

2.223

2.0

2.0

2.0

2.0

2.0

1.429 2.50

2.50

2.50

2.50

2.50

2.222

2.223

2.222

2.223

2.222

2.0

2.0

2.0

2.0

2.0

1.25 2.223

2.222

2.223

2.222

2.223

2.0

2.0

2.0

2.0

2.0

1.111 2.0

2.0

1.0

74 Publication 946 (2023)
Table A-9. Straight Line Method

Mid-Quarter Convention

Placed in Service in First Quarter

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

2.5

35.0%

40.0

25.0

3

29.17%

33.33

33.33

4.17

3.5

25.00%

28.57

28.57

17.86

4

21.88%

25.00

25.00

25.00

3.12

5

17.5%

20.0

20.0

20.0

20.0

2.5

6

14.58%

16.67

16.67

16.67

16.66

16.67

2.08

6.5

13.46%

15.38

15.39

15.38

15.39

15.38

9.62

7

12.50%

14.29

14.28

14.29

14.28

14.29

14.28

1.79

7.5

11.67%

13.33

13.33

13.33

13.34

13.33

13.34

8.33

8

10.94%

12.50

12.50

12.50

12.50

12.50

12.50

12.50

1.56

8.5

10.29%

11.77

11.76

11.77

11.76

11.77

11.76

11.77

7.35

9

9.72%

11.11

11.11

11.11

11.11

11.11

11.11

11.12

11.11

1.39

9.5

9.21%

10.53

10.53

10.53

10.52

10.53

10.52

10.53

10.52

6.58

Table A-9. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10

8.75%

10.00

10.00

10.00

10.00

10.5

8.33%

9.52

9.52

9.53

9.52

11

7.95%

9.09

9.09

9.09

9.09

12

7.61%

8.70

8.70

8.69

8.70

12.5

7.29%

8.33

8.33

8.33

8.33

13

7.0%

8.0

8.0

8.0

8.0

13.5

6.73%

7.69

7.69

7.69

7.69

14

6.48%

7.41

7.41

7.41

7.41

15

6.25%

7.14

7.14

7.14

7.14

16

5.83%

6.67

6.67

6.67

6.67

16.5

5.47%

6.25

6.25

6.25

6.25

17

5.30%

6.06

6.06

6.06

6.06

11.5

5.15%

5.88

5.88

5.88

5.88

11

12

13

14

15

16

17

18

10.00

10.00

10.00

10.00

10.00

9.53

9.52

9.53

9.52

9.53

9.09

9.09

9.09

9.09

9.10

8.69

8.70

8.69

8.70

8.69

8.34

8.33

8.34

8.33

8.34

8.0

8.0

8.0

8.0

8.0

7.69

7.69

7.69

7.70

7.69

7.41

7.41

7.41

7.40

7.41

7.14

7.14

7.15

7.14

7.15

6.67

6.67

6.66

6.67

6.66

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.88

5.88

5.88

5.88

5.88

1.25 5.95 9.09

1.14

8.70

5.43

8.33

8.34

1.04

8.0

8.0

5.0

7.70

7.69

7.70

0.96

7.40

7.41

7.40

4.63

7.14

7.15

7.14

7.15

0.89

6.67

6.66

6.67

6.66

6.67

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.88

5.89

5.88

5.89

5.88

0.83 6.25

0.78

6.07

3.79

5.89

5.88

0.74

Publication 946 (2023) 75
Table A-9. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18

4.86%

5.56

5.56

5.56

5.55

19

4.61%

5.26

5.26

5.26

5.26

20

4.375%

5.000

5.000

5.000

5.000

24

3.977%

4.545

4.545

4.546

4.545

25

3.646%

4.167

4.167

4.167

4.167

26.5

3.5%

4.0

4.0

4.0

4.0

28

3.302%

3.774

3.774

3.774

3.774

30

3.125%

3.571

3.571

3.571

3.571

35

2.917%

3.333

3.333

3.333

3.333

40

2.500%

2.857

2.857

2.857

2.857

45

2.188%

2.500

2.500

2.500

2.500

50

1.944%

2.222

2.222

2.222

2.222

22

1.75%

2.00

2.00

2.00

2.00

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47–50

51

5.56

5.55

5.56

5.55

5.56

5.26

5.26

5.26

5.26

5.27

5.000

5.000

5.000

5.000

5.000

4.546

4.545

4.546

4.545

4.546

4.167

4.167

4.167

4.167

4.166

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.572

3.571

3.572

3.571

3.572

3.333

3.333

3.333

3.333

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

5.55

5.56

5.55

5.56

5.55

5.26

5.27

5.26

5.27

5.26

5.000

5.000

5.000

5.000

5.000

4.545

4.546

4.545

4.546

4.545

4.167

4.166

4.167

4.166

4.167

4.0

4.0

4.0

4.0

4.0

3.773

3.774

3.773

3.774

3.773

3.571

3.572

3.571

3.572

3.571

3.333

3.333

3.334

3.333

3.334

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

5.56

5.55

5.56

0.69

5.27

5.26

5.27

5.26

0.66

5.000

5.000

5.000

5.000

5.000

4.546

4.545

4.546

4.545

4.546

4.166

4.167

4.166

4.167

4.166

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.572

3.571

3.572

3.571

3.572

3.333

3.334

3.333

3.334

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

0.625 4.545

4.546

0.568

4.167

4.166

4.167

4.166

0.521

4.0

4.0

4.0

4.0

4.0

3.773

3.774

3.773

3.774

3.773

3.571

3.572

3.571

3.572

3.571

3.334

3.333

3.334

3.333

3.334

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

0.5 3.774

2.358

3.572

3.571

3.572

0.446

3.333

3.334

3.333

3.334

3.333

2.857

2.858

2.857

2.858

2.857

2.500

2.500

2.500

2.500

2.500

2.223

2.222

2.223

2.222

2.223

2.00

2.00

2.00

2.00

2.00

0.417 2.858

2.857

2.858

2.857

2.858

2.500

2.500

2.500

2.500

2.500

2.222

2.223

2.222

2.223

2.222

2.00

2.00

2.00

2.00

2.00

0.357 2.500

2.500

2.500

2.500

2.500

2.223

2.222

2.223

2.222

2.223

2.00

2.00

2.00

2.00

2.00

0.312 2.222

2.223

2.222

2.223

2.222

2.00

2.00

2.00

2.00

2.00

0.278 2.00

2.00

0.25

76 Publication 946 (2023)
Table A-10. Straight Line Method

Mid-Quarter Convention

Placed in Service in Second Quarter

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

2.5

25.0%

40.0

35.0

3

20.83%

33.33

33.34

12.50

3.5

17.86%

28.57

28.57

25.00

4

15.63%

25.00

25.00

25.00

9.37

5

12.5%

20.0

20.0

20.0

20.0

7.5

6

10.42%

16.67

16.67

16.66

16.67

16.66

6.25

6.5

9.62%

15.38

15.38

15.39

15.38

15.39

13.46

7

8.93%

14.29

14.28

14.29

14.28

14.29

14.28

5.36

7.5

8.33%

13.33

13.33

13.34

13.33

13.34

13.33

11.67

8

7.81%

12.50

12.50

12.50

12.50

12.50

12.50

12.50

4.69

8.5

7.35%

11.77

11.76

11.77

11.76

11.77

11.76

11.77

10.29

9

6.94%

11.11

11.11

11.11

11.11

11.11

11.11

11.12

11.11

4.17

9.5

6.58%

10.53

10.53

10.53

10.52

10.53

10.52

10.53

10.52

9.21

Table A-10. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10

6.25%

10.00

10.00

10.00

10.00

10.5

5.95%

9.52

9.52

9.53

9.52

11

5.68%

9.09

9.09

9.09

9.09

12

5.43%

8.70

8.70

8.70

8.69

12.5

5.21%

8.33

8.33

8.33

8.33

13

5.0%

8.0

8.0

8.0

8.0

13.5

4.81%

7.69

7.69

7.69

7.69

14

4.63%

7.41

7.41

7.41

7.41

15

4.46%

7.14

7.14

7.14

7.14

16

4.17%

6.67

6.67

6.67

6.67

16.5

3.91%

6.25

6.25

6.25

6.25

17

3.79%

6.06

6.06

6.06

6.06

11.5

3.68%

5.88

5.88

5.88

5.88

11

12

13

14

15

16

17

18

10.00

10.00

10.00

10.00

10.00

9.53

9.52

9.53

9.52

9.53

9.09

9.09

9.09

9.09

9.09

8.70

8.69

8.70

8.69

8.70

8.33

8.34

8.33

8.34

8.33

8.0

8.0

8.0

8.0

8.0

7.69

7.69

7.69

7.69

7.70

7.41

7.41

7.41

7.40

7.41

7.14

7.15

7.14

7.15

7.14

6.67

6.66

6.67

6.66

6.67

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.88

5.88

5.88

5.88

5.88

3.75 8.33 9.10

3.41

8.69

7.61

8.34

8.33

3.13

8.0

8.0

7.0

7.69

7.70

7.69

2.89

7.40

7.41

7.40

6.48

7.15

7.14

7.15

7.14

2.68

6.66

6.67

6.66

6.67

6.66

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.88

5.89

5.88

5.89

5.88

2.50 6.25

2.34

6.06

5.31

5.89

5.88

2.21

Publication 946 (2023) 77
Table A-10. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18

3.47%

5.56

5.56

5.56

5.55

19

3.29%

5.26

5.26

5.26

5.26

20

3.125%

5.000

5.000

5.000

5.000

24

2.841%

4.545

4.545

4.545

4.546

25

2.604%

4.167

4.167

4.167

4.167

26.5

2.5%

4.0

4.0

4.0

4.0

28

2.358%

3.774

3.774

3.774

3.774

30

2.232%

3.571

3.571

3.571

3.571

35

2.083%

3.333

3.333

3.333

3.333

40

1.786%

2.857

2.857

2.857

2.857

45

1.563%

2.500

2.500

2.500

2.500

50

1.389%

2.222

2.222

2.222

2.222

22

1.25%

2.00

2.00

2.00

2.00

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47–50

51

5.56

5.55

5.56

5.55

5.56

5.26

5.26

5.26

5.27

5.26

5.000

5.000

5.000

5.000

5.000

4.545

4.546

4.545

4.546

4.545

4.167

4.167

4.167

4.167

4.167

4.0

4.0

4.0

4.0

4.0

3.774

3.774

3.773

3.774

3.773

3.572

3.571

3.572

3.571

3.572

3.333

3.333

3.333

3.333

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

5.55

5.56

5.55

5.56

5.55

5.27

5.26

5.27

5.26

5.27

5.000

5.000

5.000

5.000

5.000

4.546

4.545

4.546

4.545

4.546

4.166

4.167

4.166

4.167

4.166

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.571

3.572

3.571

3.572

3.571

3.333

3.334

3.333

3.334

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

5.56

5.55

5.56

2.08

5.26

5.27

5.26

5.27

1.97

5.000

5.000

5.000

5.000

5.000

4.545

4.546

4.545

4.546

4.545

4.167

4.166

4.167

4.166

4.167

4.0

4.0

4.0

4.0

4.0

3.773

3.774

3.773

3.774

3.773

3.572

3.571

3.572

3.571

3.572

3.334

3.333

3.334

3.333

3.334

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

1.875 4.546

4.545

1.705

4.166

4.167

4.166

4.167

1.562

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.571

3.572

3.571

3.572

3.571

3.333

3.334

3.333

3.334

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

1.5 3.773

3.302

3.572

3.571

3.572

1.339

3.334

3.333

3.334

3.333

3.334

2.857

2.857

2.858

2.857

2.858

2.500

2.500

2.500

2.500

2.500

2.222

2.223

2.222

2.223

2.222

2.00

2.00

2.00

2.00

2.00

1.250 2.857

2.858

2.857

2.858

2.857

2.500

2.500

2.500

2.500

2.500

2.223

2.222

2.223

2.222

2.223

2.00

2.00

2.00

2.00

2.00

1.072 2.500

2.500

2.500

2.500

2.500

2.222

2.223

2.222

2.223

2.222

2.00

2.00

2.00

2.00

2.00

0.937 2.223

2.222

2.223

2.222

2.223

2.00

2.00

2.00

2.00

2.00

0.833 2.00

2.00

0.75

78 Publication 946 (2023)
Table A-11. Straight Line Method

Mid-Quarter Convention

Placed in Service in Third Quarter

Year

1

2

3

4

5

11

Recovery periods in years

2.5

15.0%

40.0

40.0

5.0

3

12.50%

33.33

33.34

20.83

3.5

10.71%

28.57

28.57

28.58

3.57

4

9.38%

25.00

25.00

25.00

15.62

5

7.5%

20.0

20.0

20.0

20.0

12.5

6

6.25%

16.67

16.67

16.66

16.67

16.66

10.42

6.5

5.77%

15.38

15.39

15.38

15.39

15.38

15.39

1.92

7

5.36%

14.29

14.28

14.29

14.28

14.29

14.28

8.93

7.5

5.00%

13.33

13.33

13.33

13.34

13.33

13.34

13.33

1.67

8

4.69%

12.50

12.50

12.50

12.50

12.50

12.50

12.50

7.81

8.5

4.41%

11.76

11.77

11.76

11.77

11.76

11.77

11.76

11.77

1.47

9

4.17%

11.11

11.11

11.11

11.11

11.11

11.11

11.11

11.11

6.95

9.5

3.95%

10.53

10.53

10.52

10.53

10.52

10.53

10.52

10.53

10.52

Table A-11. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10

3.75%

10.00

10.00

10.00

10.00

10.5

3.57%

9.52

9.52

9.52

9.53

11

3.41%

9.09

9.09

9.09

9.09

12

3.26%

8.70

8.70

8.69

8.70

12.5

3.13%

8.33

8.33

8.33

8.33

13

3.0%

8.0

8.0

8.0

8.0

13.5

2.88%

7.69

7.69

7.69

7.69

14

2.78%

7.41

7.41

7.41

7.41

15

2.68%

7.14

7.14

7.14

7.14

16

2.50%

6.67

6.67

6.67

6.67

16.5

2.34%

6.25

6.25

6.25

6.25

17

2.27%

6.06

6.06

6.06

6.06

11.5

2.21%

5.88

5.88

5.88

5.88

11

12

13

14

15

16

17

18

10.00

10.00

10.00

10.00

10.00

9.52

9.53

9.52

9.53

9.52

9.09

9.09

9.09

9.09

9.09

8.69

8.70

8.69

8.70

8.69

8.33

8.34

8.33

8.34

8.33

8.0

8.0

8.0

8.0

8.0

7.69

7.69

7.70

7.69

7.70

7.41

7.41

7.40

7.41

7.40

7.14

7.14

7.14

7.15

7.14

6.67

6.66

6.67

6.66

6.67

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.88

5.88

5.88

5.88

5.88

6.25 9.53

1.19

9.10

5.68

8.70

8.69

1.09

8.34

8.33

5.21

8.0

8.0

8.0

1.0

7.69

7.70

7.69

4.81

7.41

7.40

7.41

7.40

0.93

7.15

7.14

7.15

7.14

4.47

6.66

6.67

6.66

6.67

6.66

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.88

5.89

5.88

5.89

5.88

4.17 6.25

3.91

6.07

6.06

0.76

5.89

5.88

3.68

6

7

8

9

10

1.32

Publication 946 (2023) 79
Table A-11. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18

2.08%

5.56

5.56

5.56

5.55

19

1.97%

5.26

5.26

5.26

5.26

20

1.875%

5.000

5.000

5.000

5.000

24

1.705%

4.545

4.545

4.545

4.546

25

1.563%

4.167

4.167

4.167

4.167

26.5

1.5%

4.0

4.0

4.0

4.0

28

1.415%

3.774

3.774

3.774

3.774

30

1.339%

3.571

3.571

3.571

3.571

35

1.250%

3.333

3.333

3.333

3.333

40

1.071%

2.857

2.857

2.857

2.857

45

0.938%

2.500

2.500

2.500

2.500

50

0.833%

2.222

2.222

2.222

2.222

22

0.75%

2.00

2.00

2.00

2.00

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47–50

51

5.56

5.55

5.56

5.55

5.56

5.26

5.26

5.26

5.27

5.26

5.000

5.000

5.000

5.000

5.000

4.545

4.546

4.545

4.546

4.545

4.167

4.167

4.167

4.166

4.167

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.572

3.571

3.572

3.571

3.572

3.333

3.333

3.333

3.333

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

5.55

5.56

5.55

5.56

5.55

5.27

5.26

5.27

5.26

5.27

5.000

5.000

5.000

5.000

5.000

4.546

4.545

4.546

4.545

4.546

4.166

4.167

4.166

4.167

4.166

4.0

4.0

4.0

4.0

4.0

3.773

3.774

3.773

3.774

3.773

3.571

3.572

3.571

3.572

3.571

3.333

3.334

3.333

3.334

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

5.56

5.55

5.56

3.47

5.26

5.27

5.26

5.27

3.29

5.000

5.000

5.000

5.000

5.000

4.545

4.546

4.545

4.546

4.545

4.167

4.166

4.167

4.166

4.167

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.572

3.571

3.572

3.571

3.572

3.334

3.333

3.334

3.333

3.334

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

3.125 4.546

4.545

2.841

4.166

4.167

4.166

4.167

2.604

4.0

4.0

4.0

4.0

4.0

3.773

3.774

3.773

3.774

3.773

3.571

3.572

3.571

3.572

3.571

3.333

3.334

3.333

3.334

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

2.5 3.774

3.773

0.472

3.572

3.571

3.572

2.232

3.334

3.333

3.334

3.333

3.334

2.858

2.857

2.858

2.857

2.858

2.500

2.500

2.500

2.500

2.500

2.222

2.223

2.222

2.223

2.222

2.00

2.00

2.00

2.00

2.00

2.083 2.857

2.858

2.857

2.858

2.857

2.500

2.500

2.500

2.500

2.500

2.223

2.222

2.223

2.222

2.223

2.00

2.00

2.00

2.00

2.00

1.786 2.500

2.500

2.500

2.500

2.500

2.222

2.223

2.222

2.223

2.222

2.00

2.00

2.00

2.00

2.00

1.562 2.223

2.222

2.223

2.222

2.223

2.00

2.00

2.00

2.00

2.00

1.389 2.00

2.00

1.25

80 Publication 946 (2023)
Table A-12. Straight Line Method

Mid-Quarter Convention

Placed in Service in Fourth Quarter

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

2.5

5.0%

40.0

40.0

15.0

3

4.17%

33.33

33.33

29.17

3.5

3.57%

28.57

28.57

28.57

10.72

4

3.13%

25.00

25.00

25.00

21.87

5

2.5%

20.0

20.0

20.0

20.0

17.5

6

2.08%

16.67

16.67

16.67

16.66

16.67

14.58

6.5

1.92%

15.39

15.38

15.39

15.38

15.39

15.38

5.77

7

1.79%

14.29

14.28

14.29

14.28

14.29

14.28

12.50

7.5

1.67%

13.33

13.33

13.33

13.33

13.34

13.33

13.34

5.00

8

1.56%

12.50

12.50

12.50

12.50

12.50

12.50

12.50

10.94

8.5

1.47%

11.76

11.77

11.76

11.77

11.76

11.77

11.76

11.77

4.41

9

1.39%

11.11

11.11

11.11

11.11

11.11

11.11

11.11

11.11

9.73

9.5

1.32%

10.53

10.53

10.52

10.53

10.52

10.53

10.52

10.53

10.52

Table A-12. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10

1.25%

10.00

10.00

10.00

10.00

10.5

1.19%

9.52

9.52

9.52

9.53

11

1.14%

9.09

9.09

9.09

9.09

12

1.09%

8.70

8.69

8.70

8.69

12.5

1.04%

8.33

8.33

8.33

8.33

13

1.0%

8.0

8.0

8.0

8.0

13.5

0.96%

7.69

7.69

7.69

7.69

14

0.93%

7.41

7.41

7.41

7.41

15

0.89%

7.14

7.14

7.14

7.14

16

0.83%

6.67

6.67

6.67

6.67

16.5

0.78%

6.25

6.25

6.25

6.25

17

0.76%

6.06

6.06

6.06

6.06

11.5

0.74%

5.88

5.88

5.88

5.88

11

12

13

14

15

16

17

18

10.00

10.00

10.00

10.00

10.00

9.52

9.53

9.52

9.53

9.52

9.09

9.09

9.09

9.09

9.09

8.70

8.69

8.70

8.69

8.70

8.34

8.33

8.34

8.33

8.34

8.0

8.0

8.0

8.0

8.0

7.69

7.69

7.69

7.70

7.69

7.41

7.41

7.40

7.41

7.40

7.14

7.14

7.15

7.14

7.15

6.67

6.67

6.66

6.67

6.66

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.88

5.88

5.88

5.88

5.88

8.75 9.53

3.57

9.09

7.96

8.69

8.70

3.26

8.33

8.34

7.29

8.0

8.0

8.0

3.0

7.70

7.69

7.70

6.73

7.41

7.40

7.41

7.40

2.78

7.14

7.15

7.14

7.15

6.25

6.67

6.66

6.67

6.66

6.67

6.25

6.25

6.25

6.25

6.25

6.06

6.06

6.06

6.06

6.06

5.88

5.89

5.88

5.89

5.88

5.83 6.25

5.47

6.06

6.07

2.27

5.89

5.88

5.15

11 3.95

Publication 946 (2023) 81
Table A-12. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18

0.69%

5.56

5.56

5.56

5.55

19

0.66%

5.26

5.26

5.26

5.26

20

0.625%

5.000

5.000

5.000

5.000

24

0.568%

4.545

4.545

4.546

4.545

25

0.521%

4.167

4.167

4.167

4.167

26.5

0.5%

4.0

4.0

4.0

4.0

28

0.472%

3.774

3.774

3.774

3.774

30

0.446%

3.571

3.571

3.571

3.571

35

0.417%

3.333

3.333

3.333

3.333

40

0.357%

2.857

2.857

2.857

2.857

45

0.313%

2.500

2.500

2.500

2.500

50

0.278%

2.222

2.222

2.222

2.222

22

0.25%

2.00

2.00

2.00

2.00

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47–50

51

5.56

5.55

5.56

5.55

5.56

5.26

5.26

5.26

5.26

5.27

5.000

5.000

5.000

5.000

5.000

4.546

4.545

4.546

4.545

4.546

4.167

4.167

4.167

4.167

4.166

4.0

4.0

4.0

4.0

4.0

3.773

3.774

3.773

3.774

3.773

3.572

3.571

3.572

3.571

3.572

3.333

3.333

3.333

3.333

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

5.55

5.56

5.55

5.56

5.55

5.26

5.27

5.26

5.27

5.26

5.000

5.000

5.000

5.000

5.000

4.545

4.546

4.545

4.546

4.545

4.167

4.166

4.167

4.166

4.167

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.571

3.572

3.571

3.572

3.571

3.333

3.333

3.334

3.333

3.334

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

5.56

5.55

5.56

4.86

5.27

5.26

5.27

5.26

4.61

5.000

5.000

5.000

5.000

5.000

4.546

4.545

4.546

4.545

4.546

4.166

4.167

4.166

4.167

4.166

4.0

4.0

4.0

4.0

4.0

3.773

3.774

3.773

3.774

3.773

3.572

3.571

3.572

3.571

3.572

3.333

3.334

3.333

3.334

3.333

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

4.375 4.545

4.546

3.977

4.167

4.166

4.167

4.166

3.646

4.0

4.0

4.0

4.0

4.0

3.774

3.773

3.774

3.773

3.774

3.571

3.572

3.571

3.572

3.571

3.334

3.333

3.334

3.333

3.334

2.857

2.857

2.857

2.857

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.222

2.222

2.222

2.00

2.00

2.00

2.00

2.00

3.5 3.773

3.774

1.415

3.572

3.571

3.572

3.125

3.333

3.334

3.333

3.334

3.333

2.857

2.858

2.857

2.858

2.857

2.500

2.500

2.500

2.500

2.500

2.222

2.222

2.223

2.222

2.223

2.00

2.00

2.00

2.00

2.00

2.917 2.858

2.857

2.858

2.857

2.858

2.500

2.500

2.500

2.500

2.500

2.222

2.223

2.222

2.223

2.222

2.00

2.00

2.00

2.00

2.00

2.500 2.500

2.500

2.500

2.500

2.500

2.223

2.222

2.223

2.222

2.223

2.00

2.00

2.00

2.00

2.00

2.187 2.222

2.223

2.222

2.223

2.222

2.00

2.00

2.00

2.00

2.00

1.945 2.00

2.00

1.75

82 Publication 946 (2023)
Table A-13a. Straight Line—40 Years

Mid-Month Convention

Year

1

2–40

41

Month property placed in service

1

2.396%

2.500

0.104

2

2.188%

2.500

0.312

3

1.979%

2.500

0.521

4

1.771%

2.500

0.729

5

1.563%

2.500

0.937

6

1.354%

2.500

1.146

7

1.146%

2.500

1.354

8

0.938%

2.500

1.562

9

0.729%

2.500

1.771

10

0.521%

2.500

1.979

11

0.313%

2.500

2.187

12

0.104%

2.500

2.396

Table A-14. 150% Declining Balance Method

Half-Year Convention

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

2.5

30.0%

42.0

28.0

3

25.0%

37.5

25.0

12.5

3.5

21.43%

33.67

22.45

22.45

4

18.75%

30.47

20.31

20.31

10.16

5

15.00%

25.50

17.85

16.66

16.66

8.33

6

12.50%

21.88

16.41

14.06

14.06

14.06

7.03

6.5

11.54%

20.41

15.70

13.09

13.09

13.09

13.08

7

10.71%

19.13

15.03

12.25

12.25

12.25

12.25

6.13

7.5

10.00%

18.00

14.40

11.52

11.52

11.52

11.52

11.52

8

9.38%

16.99

13.81

11.22

10.80

10.80

10.80

10.80

5.40

8.5

8.82%

16.09

13.25

10.91

10.19

10.19

10.18

10.19

10.18

9

8.33%

15.28

12.73

10.61

9.65

9.64

9.65

9.64

9.65

4.82

9.5

7.89%

14.54

12.25

10.31

9.17

9.17

9.17

9.17

9.17

9.16

Table A-14. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10

7.50%

13.88

11.79

10.02

8.74

10.5

7.14%

13.27

11.37

9.75

8.35

11

6.82%

12.71

10.97

9.48

8.18

12

6.52%

12.19

10.60

9.22

8.02

12.5

6.25%

11.72

10.25

8.97

7.85

13

6.00%

11.28

9.93

8.73

7.69

13.5

5.77%

10.87

9.62

8.51

7.53

14

5.56%

10.49

9.33

8.29

7.37

15

5.36%

10.14

9.05

8.08

7.22

16

5.00%

9.50

8.55

7.70

6.93

16.5

4.69%

8.94

8.10

7.34

6.65

17

4.55%

8.68

7.89

7.17

6.52

11.5

4.41%

8.43

7.69

7.01

6.39

11

12

13

14

15

16

17

18

8.74

8.74

8.74

8.74

8.74

8.35

8.35

8.35

8.36

8.35

7.98

7.97

7.98

7.97

7.98

7.64

7.64

7.63

7.64

7.63

7.33

7.33

7.33

7.33

7.33

7.05

7.05

7.05

7.04

7.05

6.79

6.79

6.79

6.79

6.79

6.55

6.55

6.55

6.55

6.55

6.44

6.32

6.32

6.32

6.32

6.23

5.90

5.90

5.91

5.90

6.03

5.55

5.55

5.55

5.55

5.93

5.39

5.39

5.39

5.39

5.83

5.32

5.23

5.23

5.23

4.37 8.36 7.97

3.99

7.64

7.63

7.32

7.33

3.66

7.04

7.05

7.04

6.79

6.78

6.79

3.39

6.55

6.55

6.56

6.55

6.32

6.32

6.32

6.31

3.16

5.91

5.90

5.91

5.90

5.91

5.55

5.55

5.54

5.55

5.54

5.39

5.39

5.38

5.39

5.38

5.23

5.23

5.23

5.23

5.23

2.95 5.55

2.77

5.39

5.38

5.23

5.23

2.62

Table A-13. Residential Rental Property Placed in Service After 2017

Straight Line—30 Years

Mid-Month Convention

Year

1

2–30

31

Month property placed in service

1

3.204%

3.333

0.139

2

2.926%

3.333

0.417

3

2.649%

3.333

0.694

4

2.371%

3.333

0.972

5

2.093%

3.333

1.250

6

1.815%

3.333

1.528

7

1.528%

3.333

1.815

8

1.250%

3.333

2.093

9

0.972%

3.333

2.371

10

0.694%

3.333

2.649

11

0.417%

3.333

2.926

12

0.139%

3.333

3.204

Publication 946 (2023) 83
Table A-14. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18

4.17%

7.99

7.32

6.71

6.15

19

3.95%

7.58

6.98

6.43

5.93

20

3.750%

7.219

6.677

6.177

5.713

24

3.409%

6.586

6.137

5.718

5.328

25

3.125%

6.055

5.676

5.322

4.989

26.5

3.000%

5.820

5.471

5.143

4.834

28

2.830%

5.500

5.189

4.895

4.618

30

2.679%

5.214

4.934

4.670

4.420

35

2.500%

4.875

4.631

4.400

4.180

40

2.143%

4.194

4.014

3.842

3.677

45

1.875%

3.680

3.542

3.409

3.281

50

1.667%

3.278

3.169

3.063

2.961

22

1.500%

2.955

2.866

2.780

2.697

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

5.64

5.17

4.94

4.94

4.94

5.46

5.03

4.69

4.69

4.69

5.285

4.888

4.522

4.462

4.461

4.965

4.627

4.311

4.063

4.063

4.677

4.385

4.111

3.854

3.729

4.544

4.271

4.015

3.774

3.584

4.357

4.110

3.877

3.658

3.451

4.183

3.959

3.747

3.546

3.356

3.971

3.772

3.584

3.404

3.234

3.520

3.369

3.225

3.086

2.954

3.158

3.040

2.926

2.816

2.710

2.862

2.767

2.674

2.585

2.499

2.616

2.538

2.461

2.388

2.316

4.94

4.95

4.94

4.95

4.94

4.69

4.69

4.69

4.69

4.69

4.462

4.461

4.462

4.461

4.462

4.063

4.063

4.064

4.063

4.064

3.729

3.729

3.730

3.729

3.730

3.583

3.584

3.583

3.584

3.583

3.383

3.383

3.383

3.383

3.383

3.205

3.205

3.205

3.205

3.205

3.072

2.994

2.994

2.994

2.994

2.828

2.706

2.590

2.571

2.571

2.609

2.511

2.417

2.326

2.253

2.416

2.335

2.257

2.182

2.110

2.246

2.179

2.114

2.050

1.989

4.95

4.94

4.95

2.47

4.69

4.69

4.70

4.69

2.35

4.461

4.462

4.461

4.462

4.461

4.063

4.064

4.063

4.064

4.063

3.729

3.730

3.729

3.730

3.729

3.584

3.583

3.584

3.583

3.584

3.383

3.383

3.383

3.383

3.384

3.205

3.205

3.205

3.205

3.205

2.994

2.994

2.994

2.994

2.993

2.571

2.571

2.571

2.571

2.571

2.253

2.253

2.253

2.253

2.253

2.039

2.005

2.005

2.005

2.005

1.929

1.871

1.815

1.806

1.806

2.231 4.064

4.063

2.032

3.730

3.729

3.730

3.729

1.865

3.583

3.584

3.583

3.584

3.583

3.383

3.384

3.383

3.384

3.383

3.205

3.205

3.205

3.205

3.205

2.994

2.993

2.994

2.993

2.994

2.571

2.571

2.571

2.571

2.571

2.253

2.253

2.253

2.253

2.253

2.005

2.005

2.005

2.004

2.005

1.806

1.806

1.806

1.806

1.806

1.792 3.384

3.383

3.205

3.205

3.205

1.602

2.993

2.994

2.993

2.994

2.993

2.571

2.571

2.572

2.571

2.572

2.253

2.253

2.253

2.253

2.253

2.004

2.005

2.004

2.005

2.004

1.806

1.806

1.806

1.806

1.806

1.497 2.571

2.572

2.571

2.572

2.571

2.253

2.253

2.252

2.253

2.252

2.005

2.004

2.005

2.004

2.005

1.806

1.806

1.806

1.806

1.806

1.286 2.253

2.252

2.253

2.252

2.253

2.004

2.005

2.004

2.005

2.004

1.806

1.806

1.806

1.806

1.806

1.126 2.005

2.004

2.005

2.004

2.005

1.806

1.805

1.806

1.805

1.806

1.002 1.805

1.806

1.805

1.806

1.805

51 0.903

84 Publication 946 (2023)
Table A-15. 150% Declining Balance Method

Mid-Quarter Convention

Property Placed in Service in First Quarter

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

2.5

52.50%

29.23

18.27

3

43.75%

28.13

25.00

3.12

3.5

37.50%

26.79

21.98

13.73

4

32.81%

25.20

19.76

19.76

2.47

5

26.25%

22.13

16.52

16.52

16.52

2.06

6

21.88%

19.53

14.65

14.06

14.06

14.06

1.76

6.5

20.19%

18.42

14.17

13.03

13.02

13.03

8.14

7

18.75%

17.41

13.68

12.16

12.16

12.16

12.16

1.52

7.5

17.50%

16.50

13.20

11.42

11.42

11.41

11.42

7.13

8

16.41%

15.67

12.74

10.77

10.77

10.76

10.77

10.76

1.35

8.5

15.44%

14.92

12.29

10.20

10.19

10.20

10.19

10.20

6.37

9

14.58%

14.24

11.86

9.89

9.64

9.65

9.64

9.65

9.64

1.21

9.5

13.82%

13.61

11.46

9.65

9.15

9.15

9.15

9.15

9.14

5.72

Table A-15. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10 10.5 11 11.5 12 12.5 13 13.5 14 15 16 16.5 17

11

12

13

14

15

16

17

18

13.13%

13.03

11.08

9.41

8.71

8.71

8.71

8.71

8.71

8.71

1.09

12.50%

12.50

10.71

9.18

8.32

8.32

8.32

8.32

8.32

8.31

5.20

11.93%

12.01

10.37

8.96

7.96

7.96

7.96

7.96

7.96

7.97

7.96

1.00

11.41%

11.56

10.05

8.74

7.64

7.64

7.64

7.64

7.64

7.63

7.64

4.77

10.94%

11.13

9.74

8.52

7.46

7.33

7.33

7.33

7.33

7.32

7.33

7.32

0.92

10.50%

10.74

9.45

8.32

7.32

7.04

7.04

7.04

7.04

7.04

7.04

7.03

4.40

10.10%

10.37

9.18

8.12

7.18

6.78

6.77

6.78

6.77

6.78

6.77

6.78

6.77

0.85

9.72%

10.03

8.92

7.93

7.04

6.53

6.54

6.53

6.54

6.53

6.54

6.53

6.54

4.08

8.75%

9.13

8.21

7.39

6.65

5.99

5.90

5.91

5.90

5.91

5.90

5.91

5.90

5.91

5.90

0.74

9.38%

9.71

8.67

7.74

6.91

6.31

6.31

6.31

6.31

6.31

6.31

6.31

6.32

6.31

0.79

8.20%

8.61

7.80

7.07

6.41

5.80

5.54

5.54

5.54

5.54

5.54

5.54

5.54

5.55

5.54

5.55

0.69

7.95%

8.37

7.61

6.92

6.29

5.71

5.38

5.38

5.38

5.38

5.38

5.38

5.38

5.38

5.38

5.37

3.36

7.72%

8.14

7.42

6.77

6.17

5.63

5.23

5.23

5.23

5.23

5.23

5.22

5.23

5.22

5.23

5.22

5.23

0.65

Publication 946 (2023) 85
Table A-15. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18 19 20 22 24 25 26.5 28 30 35 40 45 50

11

12

13

14

15

16

17

18

7.29% 6.91% 6.563% 5.966% 5.469% 5.250% 4.953% 4.688% 4.375% 3.750% 3.281% 2.917% 2.625%

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

7.73

7.08

6.49

5.95

5.45

5.00

4.94

4.95

4.94

4.95

4.94

4.95

4.94

4.95

4.94

4.95

4.94

0.62

7.35 7.008 6.411 5.908 5.685 5.380 5.106 4.781 4.125

6.77 6.482 5.974 5.539 5.344 5.075 4.832 4.542

6.23 5.996 5.567 5.193 5.023 4.788 4.574 4.315

5.74 5.546 5.187 4.868 4.722 4.517 4.329 4.099

5.29 5.130 4.834 4.564 4.439 4.262 4.097 3.894 3.462

4.87 4.746 4.504 4.279 4.172 4.020 3.877 3.700 3.314

4.69 4.459 4.197 4.011 3.922 3.793 3.669 3.515 3.172

4.69 4.459 4.061 3.761 3.687 3.578 3.473 3.339 3.036

4.69 4.459 4.061 3.729 3.582 3.383 3.287 3.172 2.906

4.69 4.459 4.061 3.729 3.582 3.384 3.204 3.013 2.781

4.69 4.460 4.061 3.730 3.582 3.383 3.204 2.994 2.662

4.69 4.459 4.061 3.729 3.582 3.384 3.204 2.994 2.571

4.69 4.460 4.061 3.730 3.582 3.383 3.204 2.994 2.571

4.68 4.459 4.061 3.729 3.582 3.384 3.204 2.994 2.571

4.69 4.460 4.061 3.730 3.582 3.383 3.204 2.994 2.571

4.68 4.459 4.061 3.729 3.582 3.384 3.204 2.994 2.571

4.69 4.460 4.061 3.730 3.582 3.383 3.204 2.994 2.571

4.68 4.459 4.061 3.729 3.581 3.384 3.204 2.994 2.571

0.59 4.460 4.060 3.730 3.582 3.383 3.204 2.994 2.571

0.557 4.061 3.729 3.581 3.384 3.203 2.993 2.571

4.060 3.730 3.582 3.383 3.204 2.994 2.571

0.508 3.729 3.581 3.384 3.203 2.993 2.571

3.730 3.582 3.383 3.204 2.994 2.570

0.466 3.581 3.384 3.203 2.993 2.571

0.448 3.383 3.204 2.994 2.570

2.115 3.203 2.993 2.571

3.204 2.994 2.570

0.400 2.993 2.571

2.994 2.570

0.374 2.571

2.570

2.571

2.570

2.571

3.948

3.779

3.617

0.321

3.627

3.491

3.360

3.234

3.113

2.996

2.884

2.776

2.671

2.571

2.475

2.382

2.293

2.252

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

0.282

3.236

3.128

3.024

2.923

2.826

2.732

2.640

2.552

2.467

2.385

2.306

2.229

2.154

2.083

2.013

2.005

2.005

2.005

2.005

2.005

2.005

2.005

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

0.251

2.921

2.834

2.749

2.666

2.586

2.509

2.433

2.360

2.290

2.221

2.154

2.090

2.027

1.966

1.907

1.850

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

0.226

86 Publication 946 (2023)
Table A-16. 150% Declining Balance Method

Mid-Quarter Convention

Property Placed in Service in Second Quarter

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

2.5 3 3.5 4 5 6 6.5 7 7.5 8 8.5 9 9.5

Table A-16. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10 10.5 11 11.5 12 12.5 13 13.5 14 15 16 16.5 17

11

12

13

14

15

16

17

18

37.50%

37.50

25.00

31.25%

34.38

25.00

9.37

26.79%

31.38

22.31

19.52

23.44%

28.71

20.15

20.15

7.55

18.75%

6.29

15.63%

21.09

15.82

14.06

14.06

14.07

5.27

24.38

17.06

16.76

16.76

14.42%

19.75

15.19

13.07

13.07

13.07

11.43

13.39%

18.56

14.58

12.22

12.22

12.22

12.23

4.58

12.50%

17.50

14.00

11.49

11.49

11.49

11.48

10.05

11.72%

16.55

13.45

10.93

10.82

10.82

10.83

10.82

4.06

11.03%

15.70

12.93

10.65

10.19

10.19

10.19

10.20

8.92

10.42%

14.93

12.44

10.37

9.64

9.65

9.64

9.65

9.64

3.62

9.87%

14.23

11.98

10.09

9.16

9.16

9.16

9.17

9.16

8.02

9.38%

13.59

11.55

9.82

8.73

8.73

8.73

8.73

8.73

8.73

3.28

8.93%

13.01

11.15

9.56

8.34

8.34

8.34

8.34

8.34

8.35

7.30

8.52%

12.47

10.77

9.31

8.04

7.98

7.98

7.98

7.99

7.98

7.99

2.99

8.15%

11.98

10.42

9.06

7.88

7.64

7.64

7.64

7.64

7.63

7.64

6.68

7.81%

11.52

10.08

8.82

7.72

7.33

7.33

7.33

7.33

7.33

7.33

7.32

2.75

7.50%

11.10

9.77

8.60

7.56

7.04

7.04

7.05

7.04

7.05

7.04

7.05

6.16

7.21%

10.71

9.47

8.38

7.41

6.78

6.79

6.78

6.79

6.78

6.79

6.78

6.79

2.54

6.94%

10.34

9.19

8.17

7.26

6.55

6.55

6.55

6.54

6.55

6.54

6.55

6.54

5.73

6.70%

10.00

8.92

7.97

7.12

6.35

6.32

6.32

6.32

6.32

6.32

6.32

6.32

6.33

2.37

6.25%

9.38

8.44

7.59

6.83

6.15

5.91

5.90

5.91

5.90

5.91

5.90

5.91

5.90

5.91

2.21

5.86%

8.83

8.00

7.25

6.57

5.95

5.55

5.55

5.55

5.54

5.55

5.54

5.55

5.54

5.55

5.54

2.08

5.68%

8.57

7.80

7.09

6.44

5.86

5.38

5.39

5.38

5.39

5.38

5.39

5.38

5.39

5.38

5.39

4.71

5.51%

8.34

7.60

6.93

6.32

5.76

5.25

5.23

5.23

5.23

5.23

5.23

5.24

5.23

5.24

5.23

5.24

1.96

Publication 946 (2023) 87
Table A-16. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18 19 20 22 24 25 26.5 28 30 35 40 45 50

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

5.21%

7.90

7.24

6.64

6.08

4.93%

7.51

6.91

6.37

5.86

4.688%

7.148

6.612

6.116

5.658

4.261%

6.528

6.083

5.668

5.281

3.906%

6.006

5.631

5.279

4.949

3.750%

5.775

5.429

5.103

4.797

3.538%

5.460

5.151

4.859

4.584

3.348%

5.178

4.900

4.638

4.389

3.125%

4.844

4.602

4.371

4.153

2.679%

4.171

3.992

3.821

3.657

2.344%

3.662

3.525

3.393

3.265

2.083%

3.264

3.155

3.050

2.948

1.875%

2.944

2.855

2.770

2.687

5.58

5.11

4.94

4.94

4.95

4.94

4.95

4.94

4.95

4.94

4.95

4.94

4.95

1.85

5.40

4.98

4.69

4.69

4.69

4.69

4.69

4.69

4.69

4.69

4.69

4.69

4.69

4.69

1.76

5.233

4.841

4.478

4.463

4.463

4.463

4.463

4.463

4.463

4.462

4.463

4.462

4.463

4.462

4.463

1.673

4.921

4.586

4.273

4.063

4.063

4.062

4.063

4.062

4.063

4.062

4.063

4.062

4.063

4.062

4.063

4.062

4.063

1.523

4.639

4.349

4.078

3.823

3.729

3.729

3.729

3.730

3.729

3.730

3.729

3.730

3.729

3.730

3.729

3.730

3.729

3.730

3.729

1.399

4.509

4.238

3.984

3.745

3.583

3.583

3.583

3.583

3.583

3.583

3.583

3.583

3.583

3.583

3.583

3.583

3.583

3.583

3.582

3.583

1.343

4.325

4.080

3.849

3.631

3.426

3.384

3.383

3.384

3.383

3.384

3.383

3.384

3.383

3.384

3.383

3.384

3.383

3.384

3.383

3.384

3.383

2.961

4.154

3.932

3.721

3.522

3.333

3.205

3.205

3.205

3.205

3.205

3.204

3.205

3.204

3.205

3.204

3.205

3.204

3.205

3.204

3.205

3.204

3.205

3.204

1.202

3.945

3.748

3.561

3.383

3.213

3.053

2.994

2.994

2.994

2.994

2.994

2.994

2.993

2.994

2.993

2.994

2.993

2.994

2.993

2.994

2.993

2.994

2.993

2.994

2.993

1.123

3.501

3.351

3.207

3.069

2.938

2.812

2.692

2.576

2.571

2.571

2.571

2.571

2.571

2.571

2.571

2.572

2.571

2.572

2.571

2.572

2.571

2.572

2.571

2.572

2.571

2.572

2.571

2.572

2.571

2.572

0.964

3.143

3.025

2.912

2.802

2.697

2.596

2.499

2.405

2.315

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

0.845

2.850

2.755

2.663

2.574

2.489

2.406

2.325

2.248

2.173

2.101

2.031

2.005

2.005

2.005

2.005

2.005

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

0.752

2.606

2.528

2.452

2.378

2.307

2.238

2.171

2.106

2.042

1.981

1.922

1.864

1.808

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.805

1.806

1.805

1.806

1.805

1.806

0.677

88 Publication 946 (2023)
Table A-17. 150% Declining Balance Method

Mid-Quarter Convention

Property Placed in Service in Third Quarter

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

2.5

22.50%

46.50

27.56

3.44

3

18.75%

40.63

25.00

15.62

3.5

16.07%

35.97

22.57

22.57

2.82

4

14.06%

32.23

20.46

20.46

12.79

5

11.25%

26.63

18.64

16.56

16.57

10.35

6

9.38%

22.66

16.99

14.06

14.06

14.06

8.79

6.5

8.65%

21.08

16.22

13.10

13.10

13.11

13.10

1.64

7

8.04%

19.71

15.48

12.27

12.28

12.27

12.28

7.67

7.5

7.50%

18.50

14.80

11.84

11.48

11.48

11.48

11.48

1.44

8

7.03%

17.43

14.16

11.51

10.78

10.78

10.78

10.79

6.74

8.5

6.62%

16.48

13.57

11.18

10.18

10.17

10.18

10.17

10.18

1.27

9

6.25%

15.63

13.02

10.85

9.64

9.65

9.64

9.65

9.64

6.03

9.5

5.92%

14.85

12.51

10.53

9.17

9.17

9.18

9.17

9.18

9.17

Table A-17. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10 10.5 11 11.5 12 12.5 13 13.5 14 15 16 16.5 17

11

12

13

14

15

16

17

18

5.63%

14.16

12.03

10.23

8.75

8.75

8.75

8.74

8.75

8.74

5.47

5.36%

13.52

11.59

9.93

8.51

8.34

8.34

8.34

8.34

8.34

8.35

1.04

5.11%

12.94

11.18

9.65

8.33

7.97

7.97

7.97

7.97

7.97

7.96

4.98

4.89%

7.63

7.63

7.63

7.63

7.63

7.63

7.64

0.95

4.69%

11.91

10.43

9.12

7.98

7.33

7.33

7.33

7.33

7.32

7.33

7.32

4.58

4.50%

11.46

10.08

8.88

7.81

7.05

7.05

7.05

7.05

7.05

7.05

7.04

7.05

0.88

4.33%

11.04

9.77

8.64

7.64

6.79

6.79

6.79

6.79

6.79

6.79

6.80

6.79

4.25

4.17%

10.65

9.46

8.41

7.48

6.65

6.55

6.54

6.55

6.54

6.55

6.54

6.55

6.54

0.82

3.75%

9.63

8.66

7.80

7.02

6.31

5.90

5.90

5.91

5.90

5.91

5.90

5.91

5.90

5.91

3.69

4.02%

10.28

9.18

8.20

7.32

6.54

6.31

6.31

6.32

6.31

6.32

6.31

6.32

6.31

3.95

3.52%

9.05

8.20

7.43

6.73

6.10

5.55

5.55

5.55

5.55

5.55

5.55

5.55

5.55

5.55

5.55

3.47

3.41%

8.78

7.98

7.26

6.60

6.00

5.45

5.38

5.39

5.38

5.39

5.38

5.39

5.38

5.39

5.38

5.39

0.67

3.31%

8.53

7.78

7.09

6.47

5.90

5.38

5.23

5.23

5.23

5.23

5.23

5.22

5.23

5.22

5.23

5.22

3.27

11 1.15

12.41

10.79

9.38

8.16

Publication 946 (2023) 89
Table A-17. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18 19 20 22 24 25 26.5 28 30 35 40 45 50

11

12

13

14

15

16

17

18

3.13% 2.96% 2.813% 2.557% 2.344% 2.250% 2.123% 2.009% 1.875% 1.607% 1.406% 1.250% 1.125%

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

8.07

7.40

6.78

6.22

5.70

5.23

4.94

4.94

4.94

4.94

4.95

4.94

4.95

4.94

4.95

4.94

4.95

3.09

7.66

7.06

6.50

5.99

7.289

6.742

6.237

5.769

6.644

6.191

5.769

5.375

6.104

5.722

5.364

5.029

5.865

5.513

5.182

4.871

5.540

5.227

4.931

4.652

5.250

4.968

4.702

4.450

4.906

4.661

4.428

4.207

4.217

4.036

3.863

3.698

5.51

5.08

4.69

4.69

4.69

5.336

4.936

4.566

4.460

4.460

5.009

4.667

4.349

4.064

4.064

4.715

4.420

4.144

3.885

3.729

4.579

4.304

4.046

3.803

3.584

4.388

4.140

3.906

3.685

3.476

4.212

3.986

3.773

3.571

3.379

3.996

3.796

3.607

3.426

3.255

3.539

3.387

3.242

3.103

2.970

4.69

4.69

4.69

4.69

4.70

4.460

4.460

4.461

4.460

4.461

4.064

4.064

4.064

4.064

4.064

3.730

3.729

3.730

3.729

3.730

3.584

3.584

3.584

3.584

3.584

3.383

3.383

3.383

3.383

3.383

3.205

3.205

3.205

3.205

3.205

3.092

2.994

2.994

2.994

2.994

2.843

2.721

2.605

2.571

2.571

4.69

4.70

4.69

4.70

2.93

4.460

4.461

4.460

4.461

4.460

4.064

4.064

4.065

4.064

4.065

3.729

3.730

3.729

3.730

3.729

3.584

3.584

3.584

3.584

3.584

3.383

3.383

3.383

3.383

3.383

3.206

3.205

3.206

3.205

3.206

2.994

2.994

2.994

2.994

2.993

2.571

2.571

2.571

2.571

2.571

2.788 4.064

4.065

2.540

3.730

3.729

3.730

3.729

2.331

3.383

3.383

3.383

3.383

3.382

3.205

3.206

3.205

3.206

3.205

2.994

2.993

2.994

2.993

2.994

2.571

2.571

2.571

2.571

2.571

2.240 3.383

3.382

0.423

3.206

3.205

3.206

2.003

2.993

2.994

2.993

2.994

2.993

2.571

2.571

2.571

2.571

2.571

1.871 2.571

2.571

2.571

2.571

2.571

1.607

3.697

3.559

3.425

3.297

2.621

2.523

2.428

2.337

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.254

2.253

2.254

1.408

3.292

3.182

3.076

2.973

2.874

2.778

2.686

2.596

2.510

2.426

2.345

2.267

2.192

2.118

2.048

2.005

2.005

2.005

2.005

2.005

2.005

2.005

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

1.253

2.966

2.877

2.791

2.707

2.626

2.547

2.471

2.397

2.325

2.255

2.187

2.122

2.058

1.996

1.937

1.878

1.822

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.128

3.585

3.584

3.585

3.584

3.585

3.173

3.054

2.940

2.829

2.723

90 Publication 946 (2023)
Table A-18. 150% Declining Balance Method

Mid-Quarter Convention

Property Placed in Service in Fourth Quarter

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

2.5

7.50%

55.50

26.91

10.09

3

6.25%

46.88

25.00

21.87

3.5

5.36%

40.56

23.18

22.47

8.43

4

4.69%

35.74

22.34

19.86

17.37

5

3.75%

28.88

20.21

16.40

16.41

14.35

6

3.13%

24.22

18.16

14.06

14.06

14.06

12.31

6.5

2.88%

22.41

17.24

13.26

13.10

13.10

13.10

4.91

7

2.68%

20.85

16.39

12.87

12.18

12.18

12.19

10.66

7.5

2.50%

19.50

15.60

12.48

11.41

11.41

11.41

11.41

4.28

8

2.34%

18.31

14.88

12.09

10.74

10.75

10.74

10.75

9.40

8.5

2.21%

17.26

14.21

11.70

10.16

10.16

10.16

10.16

10.17

3.81

9

2.08%

16.32

13.60

11.33

9.65

9.65

9.64

9.65

9.64

8.44

9.5

1.97%

15.48

13.03

10.98

9.24

9.17

9.17

9.17

9.17

9.18

Table A-18. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

10 10.5 11 11.5 12 12.5 13 13.5 14 15 16 16.5 17

11

12

13

14

15

16

17

18

1.88%

14.72

12.51

10.63

9.04

8.72

8.72

8.72

8.72

8.71

7.63

1.79%

14.03

12.03

10.31

8.83

8.32

8.31

8.32

8.31

8.32

8.31

3.12

1.70%

13.40

11.58

10.00

8.63

7.95

7.96

7.95

7.96

7.95

7.96

6.96

1.63%

7.63

7.63

7.62

7.63

7.62

7.63

7.62

2.86

1.56%

12.31

10.77

9.42

8.24

7.33

7.33

7.33

7.33

7.32

7.33

7.32

6.41

1.50%

11.82

10.40

9.15

8.06

7.09

7.05

7.05

7.05

7.05

7.05

7.04

7.05

2.64

1.44%

11.37

10.06

8.90

7.87

6.96

6.78

6.78

6.78

6.78

6.78

6.78

6.78

5.94

1.39%

10.96

9.74

8.66

7.69

6.84

6.53

6.53

6.53

6.54

6.53

6.54

6.53

6.54

2.45

1.25%

9.88

8.89

8.00

7.20

6.48

5.90

5.90

5.90

5.91

5.90

5.91

5.90

5.91

5.90

5.17

1.34%

10.57

9.44

8.43

7.52

6.72

6.31

6.31

6.31

6.31

6.31

6.30

6.31

6.30

5.52

1.17%

9.27

8.40

7.61

6.90

6.25

5.66

5.54

5.54

5.54

5.54

5.55

5.54

5.55

5.54

5.55

4.85

1.14%

8.99

8.17

7.43

6.75

6.14

5.58

5.38

5.38

5.38

5.38

5.38

5.38

5.38

5.37

5.38

5.37

2.02

1.10%

8.73

7.96

7.25

6.61

6.03

5.50

5.22

5.23

5.22

5.23

5.22

5.23

5.22

5.23

5.22

5.23

4.57

11 3.44

12.83

11.16

9.70

8.44

Publication 946 (2023) 91
Table A-18. ( Continued)

Year

1

2

3

4

5

6

7

8

9

10

Recovery periods in years

18 19 20 22 24 25 26.5 28 30 35 40 45 50

11

12

13

14

15

16

17

18

1.04% 0.99% 0.938% 0.852% 0.781% 0.750% 0.708% 0.670% 0.625% 0.536% 0.469% 0.417% 0.375%

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

8.25

7.56

6.93

6.35

5.82

5.34

4.94

4.94

4.94

4.95

4.94

4.95

4.94

4.95

4.94

4.95

4.94

4.33

7.82

7.20

6.63

6.11

7.430

6.872

6.357

5.880

6.760

6.299

5.870

5.469

6.201

5.814

5.450

5.110

5.955

5.598

5.262

4.946

5.620

5.302

5.002

4.719

5.321

5.036

4.766

4.511

4.969

4.720

4.484

4.260

4.263

4.080

3.905

3.738

5.63

5.18

4.77

4.69

4.69

5.439

5.031

4.654

4.458

4.458

5.097

4.749

4.425

4.124

4.062

4.790

4.491

4.210

3.947

3.730

4.649

4.370

4.108

3.862

3.630

4.452

4.200

3.962

3.738

3.526

4.269

4.041

3.824

3.619

3.426

4.047

3.845

3.653

3.470

3.296

3.578

3.424

3.278

3.137

3.003

4.69

4.69

4.69

4.69

4.69

4.458

4.458

4.458

4.458

4.458

4.062

4.062

4.062

4.061

4.062

3.729

3.730

3.729

3.730

3.729

3.582

3.582

3.582

3.582

3.582

3.383

3.382

3.383

3.382

3.383

3.242

3.204

3.204

3.204

3.204

3.132

2.994

2.994

2.994

2.994

2.874

2.751

2.633

2.570

2.571

4.69

4.68

4.69

4.68

4.10

4.458

4.458

4.459

4.458

4.459

4.061

4.062

4.061

4.062

4.061

3.730

3.729

3.730

3.729

3.730

3.583

3.582

3.583

3.582

3.583

3.382

3.383

3.382

3.383

3.382

3.204

3.204

3.204

3.204

3.204

2.994

2.994

2.994

2.993

2.994

2.570

2.571

2.570

2.571

2.570

3.901 4.062

4.061

3.554

3.729

3.730

3.729

3.730

3.263

3.383

3.382

3.383

3.382

3.383

3.204

3.204

3.205

3.204

3.205

2.993

2.994

2.993

2.994

2.993

2.571

2.570

2.571

2.570

2.571

3.135 3.382

3.383

1.268

3.204

3.205

3.204

2.804

2.994

2.993

2.994

2.993

2.994

2.570

2.571

2.570

2.571

2.570

2.619 2.571

2.570

2.571

2.570

2.571

2.249

3.732

3.592

3.458

3.328

2.646

2.547

2.451

2.359

2.271

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

2.253

2.252

1.971

3.319

3.209

3.102

2.998

2.898

2.802

2.708

2.618

2.531

2.447

2.365

2.286

2.210

2.136

2.065

2.005

2.005

2.005

2.005

2.005

2.005

2.005

2.005

2.005

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

2.005

2.004

1.754

2.989

2.899

2.812

2.728

2.646

2.567

2.490

2.415

2.342

2.272

2.204

2.138

2.074

2.011

1.951

1.893

1.836

1.806

1.806

1.806

1.806

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.806

1.805

1.580

3.582

3.583

3.582

3.583

3.582

3.203

3.083

2.968

2.856

2.749

92 Publication 946 (2023)
Table A-19. Amount A Percentages

Recovery Period

of Property

Under ADS

Less than 7 years

7 to 10 years

More than 10 years

First Tax Year During Lease in Which

Business Use is 50% or Less

1

2.1%

2

–7.2%

3

–19.8%

4

–20.1%

5

–12.4%

6

–12.4%

7 8 9 10 11 12 & Later

Table A-20.

RATES TO FIGURE INCLUSION AMOUNTS

FOR

LEASED LISTED PROPERTY

Amount B Percentages

–12.4% –12.4% –12.4% –12.4% –12.4% –12.4%

3.9% –3.8% –17.7% –25.1% –27.8% –27.2% –27.1% –27.6% –23.7% –14.7% –14.7% –14.7%

6.6% –1.6% –16.9% –25.6% –29.9% –31.1% –32.8% –35.1% –33.3% –26.7% –19.7% –12.2%

Recovery Period

of Property

Under ADS

Less than 7 years

7 to 10 years

More than 10 years

First Tax Year During Lease in Which

Business Use is 50% or Less

1

0.0%

2

10.0%

3

22.0%

4

21.2%

5

12.7%

6

12.7%

7 8 9 10 11 12 & Later

12.7% 12.7% 12.7% 12.7% 12.7% 12.7%

0.0% 9.3% 23.8% 31.3% 33.8% 32.7% 31.6% 30.5% 25.0% 15.0% 15.0% 15.0%

0.0% 10.1% 26.3% 35.4% 39.6% 40.2% 40.8% 41.4% 37.5% 29.2% 20.8% 12.5%

Publication 946 (2023) 93
1

Year

Qualified Indian Reservation Property Tables 

for Property Placed in Service Before 2022

2-Year Qualified Indian Reservation Property

Half-Year and Mid-Quarter Conventions

Table A-21.

Half-Year

Convention Q-1 Q-2 Q-3 Q-4

50.00% 87.50% 62.50% 37.50% 12.50%

2 50.00 12.50 37.50 62.50 87.50

1

Year Half-Year

Convention Q-1 Q-2 Q-3 Q-4

25.00% 43.75% 31.25% 18.75% 6.25%

2 37.50 28.13 34.37 40.63 46.87

4-Year Qualified Indian Reservation Property

Half-Year and Mid-Quarter Conventions

Table A-22.

3 18.75 14.06 17.19 20.31 23.44

4 12.50 12.50 12.50 12.50 12.50

5 6.25 1.56 4.69 7.81 10.94

1

Year Half-Year

Convention Q-1 Q-2 Q-3 Q-4

16.67% 29.17% 20.83% 12.50% 4.17%

2 27.78 23.61 26.39 29.17 31.94

6-Year Qualified Indian Reservation Property

Half-Year and Mid-Quarter Conventions

Table A-23.

3 18.52 15.74 17.59 19.44 21.30

4 12.35 10.49 11.73 12.96 14.20

5 9.87 9.88 9.88 9.88 9.87

6 9.87 9.88 9.88 9.88 9.88

7 4.94 1.23 3.70 6.17 8.64

94 Publication 946 (2023)
Table A-24. Qualified Nonresidential Real Indian Reservation Property

Mid-Month Convention

Straight Line—22 Years

Year

1

Month property placed in service

7 8 9 10 11 12

0.189%

1 2 3 4 5 6

4.356% 3.977% 3.598% 3.220% 2.841% 2.462% 2.083% 1.705% 1.326% 0.947% 0.568%

2–3 4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545 4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.545 4.545 4.545 4.545

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546 4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546

4.546 4.546 4.546 4.546

0.189% 0.568% 0.947% 1.326% 1.705% 2.083% 2.462% 2.841% 3.220% 3.598% 3.977% 4.356%

Publication 946 (2023) 95
Appendix B — Table of Class Lives and Recovery Periods

The Table of Class Lives and Recovery 

Periods has two sections. The first section, Specific Depreciable Assets Used 

in All Business Activities, Except as 

Noted, generally lists assets used in all 

business activities. It is shown as Table 

B-1. The second section, Depreciable 

Assets Used in the Following Activities, 

describes assets used only in certain 

activities. It is shown as Table B-2.

How To Use the Tables

You will need to look at both Table B-1 

and Table B-2 to find the correct recovery period. Generally, if the property is 

listed in Table B-1, you use the recovery period shown in that table. However, if the property is specifically listed 

in Table B-2 under the type of activity in 

which it is used, you use the recovery 

period listed under the activity in that 

table. Use the tables in the order 

shown below to determine the recovery 

period of your depreciable property.

Table B-1. Check Table B-1 for a description of the property. If it is described in Table B-1, also check Table B-2 

to find the activity in which the property 

is being used. If the activity is described in Table B-2, read the text (if any) 

under the title to determine if the property is specifically included in that asset class. If it is, use the recovery period shown in the appropriate column 

of Table B-2 following the description of 

the activity. If the activity is not described in Table B-2 or if the activity is described but the property either is not 

specifically included in or is specifically 

excluded from that asset class, then 

use the recovery period shown in the 

appropriate column following the description of the property in Table B-1.

Tax-exempt use property subject to 

a lease. The recovery period for ADS 

cannot be less than 125% of the lease 

term for any property leased under a 

leasing arrangement to a tax-exempt 

organization, governmental unit, or foreign person or entity (other than a partnership).

Table B-2. If the property is not listed 

in Table B-1, check Table B-2 to find 

the activity in which the property is being used and use the recovery period 

shown in the appropriate column following the description.

Property not in either table. If the 

activity or the property is not included 

in either table, check the end of Table 

B-2 to find Certain Property for Which 

Recovery Periods Assigned. This property generally has a recovery period of 

7 years for GDS or 12 years for ADS. 

See Which Property Class Applies Under GDS? and Which Recovery Period 

Applies? in chapter 4 for the class lives 

or the recovery periods for GDS and 

ADS for the following.

• Residential rental property and 

nonresidential real property (also 

see Appendix A, Chart 2).

• Qualified rent-to-own property.

• A motorsport entertainment complex.

• Any retail motor fuels outlet.

• Initial clearing and grading land improvements for gas utility property 

and electric utility transmission and 

distribution plants.

• Any water utility property.

• Certain electric transmission property used in the transmission at 69 

or more kilovolts of electricity for 

sale and placed in service after 

April 11, 2005.

• Natural gas gathering and distribution lines placed in service after 

April 11, 2005.

Example 1. You are a paper manufacturer. During the year, you made 

substantial improvements to the land 

on which your paper plant is located. 

You check Table B-1 and find land improvements under asset class 00.3. 

You then check Table B-2 and find your 

activity, paper manufacturing, under 

asset class 26.1, Manufacture of Pulp 

and Paper. You use the recovery period 

under this asset class because it specifically includes land improvements. 

The land improvements have a 13-year 

class life and a 7-year recovery period 

for GDS. If you elect to use ADS, the 

recovery period is 13 years. If you only 

looked at Table B-1, you would select 

asset class 00.3, Land Improvements, 

and incorrectly use a recovery period 

of 15 years for GDS or 20 years for 

ADS.

Example 2. You produce rubber 

products. During the year, you made 

substantial improvements to the land 

on which your rubber plant is located. 

You check Table B-1 and find land improvements under asset class 00.3. 

You then check Table B-2 and find your 

activity, producing rubber products, under asset class 30.1, Manufacture of 

Rubber Products. Reading the headings and descriptions under asset 

class 30.1, you find that it does not include land improvements. Therefore, 

you use the recovery period under asset class 00.3. The land improvements 

have a 20-year class life and a 15-year 

recovery period for GDS. If you elect to 

use ADS, the recovery period is 20 

years.

Example 3. You own a retail clothing store. During the year, you purchased a desk and a cash register for 

use in your business. You check Table 

B-1 and find office furniture under asset class 00.11. Cash registers are not 

listed in any of the asset classes in Table B-1. You then check Table B-2 and 

find your activity, retail store, under asset class 57.0, Distributive Trades and 

Services, which includes assets used 

in wholesale and retail trade. This 

asset class does not specifically list office furniture or a cash register. You 

look back at Table B-1 and use asset 

class 00.11 for the desk. The desk has 

a 10-year class life and a 7-year recovery period for GDS. If you elect to use 

ADS, the recovery period is 10 years. 

For the cash register, you use asset 

class 57.0 because cash registers are 

not listed in Table B-1 but it is an asset 

used in your retail business. The cash 

register has a 9-year class life and a 

5-year recovery period for GDS. If you 

elect to use the ADS method, the recovery period is 9 years.

96 Publication 946 (2023)
Table B-1.

Asset

class

00.11

00.12

00.13

00.21

00.22

Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

SPECIFIC DEPRECIABLE ASSETS USED IN ALL BUSINESS ACTIVITIES, EXCEPT AS NOTED:

00.23

00.241

00.242

00.25

00.26

00.27

00.28

00.3

00.4

Office Furniture, Fixtures, and Equipment:

Includes furniture and xtures that are not a structural component of a building. Includes such

assets as desks, les, safes, and communications equipment. Does not include

communications equipment that is included in other classes.

10 7 10

Information Systems:

Includes computers and their peripheral equipment used in administering normal business

transactions and the maintenance of business records, their retrieval and analysis.

Information systems are dened as:

1) Computers: A computer is a programmable electronically activated device capable of

accepting information, applying prescribed processes to the information, and supplying the

results of these processes with or without human intervention. It usually consists of a central

processing unit containing extensive storage, logic, arithmetic, and control capabilities.

Excluded from this category are adding machines, electronic desk calculators, etc., and other

equipment described in class 00.13.

2) Peripheral equipment consists of the auxiliary machines which are designed to be placed

under control of the central processing unit. Nonlimiting examples are: Card readers, card

punches, magnetic tape feeds, high speed printers, optical character readers, tape cassettes, mass storage units, paper tape equipment, keypunches, data entry devices, teleprinters,

terminals, tape drives, disc drives, disc les, disc packs, visual image projector tubes, card

sorters, plotters, and collators. Peripheral equipment may be used online or ofine.

Does not incude equipment that is an integral part of other capital equipment that is included

in other classes of economic activity, that is, computers used primarily for process or production

control, switching, channeling, and automating distributive trades and services such as point

of sale (POS) computer systems. Also, does not include equipment of a kind used primarily for

amusement or entertainment of the user.

6 5 5

Data Handling Equipment; except Computers:

Includes only typewriters, calculators, adding and accounting machines, copiers, and

duplicating equipment.

6 5 6

Airplanes (airframes and engines), except those used in commercial or contract carrying

of passengers or freight, and all helicopters (airframes and engines)

6 5 6

Automobiles, Taxis 3 5 5

Buses 9 5 9

Light General Purpose Trucks:

Includes trucks for use over the road (actual weight less than 13,000 pounds) 4 5 5

Heavy General Purpose Trucks:

Includes heavy general purpose trucks, concrete ready mix-trucks, and ore trucks, for use

over the road (actual unloaded weight 13,000 pounds or more)

6 5 6

Railroad Cars and Locomotives, except those owned by railroad transportation companies15 7 15

Tractor Units for Use Over-the-Road 4 3 4

Trailers and Trailer-Mounted Containers 6 5 6

Vessels, Barges, Tugs, and Similar Water Transportation Equipment, except those used

in marine construction

18 10 18

Land Improvements:

Includes improvements directly to or added to land, whether such improvements are section

1245 property or section 1250 property, provided such improvements are depreciable.

Examples of such assets might include sidewalks, roads, canals, waterways, drainage

facilities, sewers (not including municipal sewers in class 51), wharves and docks, bridges,

fences, landscaping shrubbery, or radio and television transmitting towers. Does not include

land improvements that are explicitly included in any other class, and buildings and structural

components as dened in section 1.48-1(e) of the regulations. Excludes public utility initial

clearing and grading land improvements as specied in Rev. Rul. 72-403, 1972-2 C.B. 102.

20 15 20

Industrial Steam and Electric Generation and/or Distribution Systems:

Includes assets, whether such assets are section 1245 property or 1250 property, providing

such assets are depreciable, used in the production and/or distribution of electricity with rated

total capacity in excess of 500 Kilowatts and/or assets used in the production and/or

distribution of steam with rated total capacity in excess of 12,500 pounds per hour for use by

the taxpayer in its industrial manufacturing process or plant activity and not ordinarily available

for sale to others. Does not include buildings and structural components as dened in section

1.48-1(e) of the regulations. Assets used to generate and/or distribute electricity or steam of

the type described above, but of lesser rated capacity, are not included, but are included in

the appropriate manufacturing equipment classes elsewhere specied. Also includes electric

generating and steam distribution assets, which may utilize steam produced by a waste

reduction and resource recovery plant, used by the taxpayer in its industrial manufacturing

process or plant activity. Steam and chemical recovery boiler systems used for the recovery

and regeneration of chemicals used in manufacturing, with rated capacity in excess of that

described above, with specically related distribution and return systems are not included but

are included in appropriate manufacturing equipment classes elsewhere specied. An example

of an excluded steam and chemical recovery boiler system is that used in the pulp and paper

manufacturing equipment classes elsewhere specied. An example of an excluded steam and

chemical recovery boiler system is that used in the pulp and paper manufacturing industry.

22 15 22

Publication 946 (2023) 97
Table B-2.

Asset

class Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

DEPRECIABLE ASSETS USED IN THE FOLLOWING ACTIVITIES:

Agriculture:

Includes machinery and equipment, grain bins, and fences but no other land improvements,

that are used in the production of crops or plants, vines, and trees; livestock; the operation of

farm dairies, nurseries, greenhouses, sod farms, mushroom cellars, cranberry bogs, apiaries,

and fur farms; the performance of agriculture, animal husbandry, and horticultural services.

10 

12 7 12

7 5 7

10 7 10

10 3 10

* 3 12

* 3 12

* 7 12

3 3 3

5 5 5

25 20 25

15 

10 7 10

7.5 5 7.5

01.1

01.11

01.21

01.221

01.222

01.223

01.224

01.225

01.23

01.24

01.3

01.4

10.0

13.0

13.1

13.2

13.3

15.0

20.1

20.2

20.3

20.4

20.5

Cotton Ginning Assets

Cattle, Breeding or Dairy

Any breeding or work horse that is 12 years old or less at the time it is placed in service**

Any breeding or work horse that is more than 12 years old at the time it is placed in service**

Any race horse that is more than 2 years old at the time it is placed in service**

Any horse that is more than 12 years old at the time it is placed in service and that is

neither a race horse nor a horse described in class 01.222**

Any horse not described in class 01.221, 01.222, 01.223, or 01.224

Hogs, Breeding

Sheep and Goats, Breeding

Farm buildings except structures included in class 01.4

Single purpose agricultural or horticultural structures (within the meaning of section

168(i)(13) of the Code)

Mining:

Includes assets used in the mining and quarrying of metallic and nonmetallic minerals (including sand,

gravel, stone, and clay) and the milling, beneciation, and other primary preparation of such materials.

Offshore Drilling:

Includes assets used in offshore drilling for oil and gas such as oating, self-propelled and

other drilling vessels, barges, platforms, and drilling equipment and support vessels such as

tenders, barges, towboats, and crewboats. Excludes oil and gas production assets.

Drilling of Oil and Gas Wells:

Includes assets used in the drilling of onshore oil and gas wells and the provision of

geophysical and other exploration services; and the provision of such oil and gas eld services

as chemical treatment, plugging and abandoning of wells, and cementing or perforating well

casings. Does not include assets used in the performance of any of these activities and

services by integrated petroleum and natural gas producers for their own account.

Exploration for and Production of Petroleum and Natural Gas Deposits:

Includes assets used by petroleum and natural gas producers for drilling of wells and production of

petroleum and natural gas, including gathering pipelines and related storage facilities. Also includes

petroleum and natural gas offshore transportation facilities used by producers and others consisting

of platforms (other than drilling platforms classied in class 13.0), compression or pumping

equipment, and gathering and transmission lines to the rst onshore transshipment facility. The assets

used in the rst onshore transshipment facility are also included and consist of separation equipment

(used for separation of natural gas, liquids, and in class 49.23), and liquid holding or storage facilities

(other than those classied in class 49.25). Does not include support vessels.

Petroleum Refining:

Includes assets used for the distillation, fractionation, and catalytic cracking of crude petroleum

into gasoline and its other components.

Construction:

Includes assets used in construction by general building, special trade, heavy, and marine

construction contractors; operative and investment builders; real estate subdividers and

developers; and others except railroads.

Manufacture of Grain and Grain Mill Products:

Includes assets used in the production of ours, cereals, livestock feeds, and other grain and

grain mill products.

Manufacture of Sugar and Sugar Products:

Includes assets used in the production of raw sugar, syrup, or nished sugar from sugar cane or sugar beets.

Manufacture of Vegetable Oils and Vegetable Oil Products:

Includes assets used in the production of oil from vegetable materials and the manufacture of

related vegetable oil products.

Manufacture of Other Food and Kindred Products:

Includes assets used in the production of foods and beverages not included in classes 20.1,

20.2, and 20.3.

Manufacture of Food and Beverages—Special Handling Devices:

Includes assets dened as specialized materials handling devices such as returnable pallets,

palletized containers, and sh processing equipment including boxes, baskets, carts, and aking trays

used in activities as dened in classes 20.1, 20.2, 20.3, and 20.4. Does not include general purpose

small tools such as wrenches and drills, both hand and power-driven, and other general purpose

equipment such as conveyors, transfer equipment, and materials handling devices.

6 5 6

14 7 14

16 10 16

6 5 6

17 10 17

18 10 18

18 10 18

12 7 12

4 3 4

Property described in asset classes 01.223, 01.224, and 01.225 are assigned recovery periods but have no class lives.

A horse is more than 2 (or 12) years old after the day that is 24 (or 144) months after its actual birthdate.

7 if property was placed in service before 1989.

*

**

***

10*** 15

7  10

5 if machinery and equipment used in a farming business (other than any grain bin, cotton ginning asset, fence, or other land improvement) placed in service 

after 2017, in tax years ending after 2017.

** **

98 Publication 946 (2023)
Table B-2.

Asset

class Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

Manufacture of Tobacco and Tobacco Products:

15 7 15

21.0

Includes assets used in the production of cigarettes, cigars, smoking and chewing tobacco,

snuff, and other tobacco products.

22.1

22.2

22.3

22.4

22.5

23.0

24.1

24.2

24.3

24.4

26.1

Manufacture of Knitted Goods:

Includes assets used in the production of knitted and netted fabrics and lace. Assets used in

yarn preparation, bleaching, dyeing, printing, and other similar nishing processes, texturing,

and packaging are elsewhere classied.

Manufacture of Yarn, Thread, and Woven Fabric:

Includes assets used in the production of spun yarns including the preparing, blending, spinning, and

twisting of bers into yarns and threads, the preparation of yarns such as twisting, warping, and winding, the

production of covered elastic yarn and thread, cordage, woven fabric, tire fabric, braided fabric, twisted jute

for packaging, mattresses, pads, sheets, and industrial belts, and the processing of textile mill waste to

recover bers, ocks, and shoddies. Assets used to manufacture carpets, man-made bers, and nonwovens,

and assets used in texturing, bleaching, dyeing, printing, and other similar nishing processes, are elsewhere

classied.

Manufacture of Carpets and Dyeing, Finishing, and Packaging of Textile Products and

Manufacture of Medical and Dental Supplies:

Includes assets used in the production of carpets, rugs, mats, woven carpet backing, chenille, and other

tufted products, and assets used in the joining together of backing with carpet yarn or fabric. Includes assets

used in washing, scouring, bleaching, dyeing, printing, drying, and similar nishing processes applied to

textile fabrics, yarns, threads, and other textile goods. Includes assets used in the production and packaging

of textile products, other than apparel, by creasing, forming, trimming, cutting, and sewing, such as the

preparation of carpet and fabric samples, or similar joining together processes (other than the production of

scrim reinforced paper products and laminated paper products) such as the sewing and folding of hosiery

and panty hose, and the creasing, folding, trimming, and cutting of fabrics to produce nonwoven products,

such as disposable diapers and sanitary products. Also includes assets used in the production of medical

and dental supplies other than drugs and medicines. Assets used in the manufacture of nonwoven carpet

backing, and hard surface oor covering such as tile, rubber, and cork, are elsewhere classied.

Manufacture of Textile Yarns:

Includes assets used in the processing of yarns to impart bulk and/or stretch properties to the

yarn. The principal machines involved are falsetwist, draw, beam-to-beam, and stuffer box

texturing equipment and related highspeed twisters and winders. Assets, as described above,

which are used to further process man-made bers are elsewhere classied when located in

the same plant in an integrated operation with man-made ber producing assets. Assets used

to manufacture man-made bers and assets used in bleaching, dyeing, printing, and other

similar nishing processes are elsewhere classied.

Manufacture of Nonwoven Fabrics:

Includes assets used in the production of nonwoven fabrics, felt goods including felt hats, padding, batting,

wadding, oakum, and llings, from new materials and from textile mill waste. Nonwoven fabrics are dened

as fabrics (other than reinforced and laminated composites consisting of nonwovens and other products)

manufactured by bonding natural and/or synthetic bers and/or laments by means of induced mechanical

interlocking, uid entanglement, chemical adhesion, thermal or solvent reaction, or by combination thereof

other than natural hydration bonding as occurs with natural cellulose bers. Such means include resin

bonding, web bonding, and melt bonding. Specically includes assets used to make ocked and needle

punched products other than carpets and rugs. Assets, as described above, which are used to manufacture

nonwovens are elsewhere classied when located in the same plant in an integrated operation with

man-made ber producing assets. Assets used to manufacture man-made bers and assets used in

bleaching, dyeing, printing, and other similar nishing processes are elsewhere classied.

Manufacture of Apparel and Other Finished Products:

Includes assets used in the production of clothing and fabricated textile products by the cutting

and sewing of woven fabrics, other textile products, and furs; but does not include assets used

in the manufacture of apparel from rubber and leather.

Cutting of Timber:

Includes logging machinery and equipment and roadbuilding equipment used by logging and

sawmill operators and pulp manufacturers for their own account.

Sawing of Dimensional Stock From Logs:

Includes machinery and equipment installed in permanent or well-established sawmills.

Sawing of Dimensional Stock From Logs:

Includes machinery and equipment in sawmills characterized by temporary foundations and a

lack, or minimum amount, of lumberhandling, drying, and residue disposal equipment and

facilities.

Manufacture of Wood Products, and Furniture:

Includes assets used in the production of plywood, hardboard, ooring, veneers, furniture, and

other wood products, including the treatment of poles and timber.

Manufacture of Pulp and Paper:

Includes assets for pulp materials handling and storage, pulp mill processing, bleach processing, paper and

paperboard manufacturing, and on-line nishing. Includes pollution control assets and all land improvements

associated with the factory site or production process such as efuent ponds and canals, provided such

improvements are depreciable but does not include buildings and structural components as dened in

section 1.48-1(e)(1) of the regulations. Includes steam and chemical recovery boiler systems, with any rated

capacity, used for the recovery and regeneration of chemicals used in manufacturing. Does not include

assets used either in pulpwood logging, or in the manufacture of hardboard.

7.5 5 7.5

11 7 11

9 5 9

8 5 8

10 7 10

9 5 9

6 5 6

10 7 10

6 5 6

10 7 10

13 7 13

Publication 946 (2023) 99
Table B-2.

Asset

class Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

Manufacture of Converted Paper, Paperboard, and Pulp Products:

10 7 10

26.2

Includes assets used for modication, or remanufacture of paper and pulp into converted

products, such as paper coated off the paper machine, paper bags, paper boxes, cartons, and

envelopes. Does not include assets used for manufacture of nonwovens that are elsewhere

classied.

11 7 11

9.5 5 9.5

14 7 14

4 3 4

11 7 11

3.5 3 3.5

11 7 11

14 7 14

2.5 3 2.5

20 15 20

15 7 15

27.0

28.0

30.1

30.11

30.2

30.21

31.0

32.1

32.11

32.2

32.3

Printing, Publishing, and Allied Industries:

Includes assets used in printing by one or more processes, such as letter-press, lithography,

gravure, or screen; the performance of services for the printing trade, such as bookbinding,

typesetting, engraving, photo-engraving, and electrotyping; and the publication of newspapers,

books, and periodicals.

Manufacture of Chemicals and Allied Products:

Includes assets used to manufacture basic organic and inorganic chemicals; chemical products

to be used in further manufacture, such as synthetic bers and plastics materials; and nished

chemical products. Includes assets used to further process man-made bers, to manufacture

plastic lm, and to manufacture nonwoven fabrics, when such assets are located in the same plant in an integrated operation with chemical products producing assets. Also includes assets

used to manufacture photographic supplies, such as lm, photographic paper, sensitized

photographic paper, and developing chemicals. Includes all land improvements associated with

plant site or production processes, such as efuent ponds and canals, provided such land

improvements are depreciable but does not include buildings and structural components as

dened in section 1.48-1(e) of the regulations. Does not include assets used in the manufacture

of nished rubber and plastic products or in the production of natural gas products, butane,

propane, and by-products of natural gas production plants.

Manufacture of Rubber Products:

Includes assets used for the production of products from natural, synthetic, or reclaimed

rubber, gutta percha, balata, or gutta siak, such as tires, tubes, rubber footwear, mechanical

rubber goods, heels and soles, ooring, and rubber sundries; and in the recapping, retreading,

and rebuilding of tires.

Manufacture of Rubber Products—Special Tools and Devices:

Includes assets dened as special tools, such as jigs, dies, mandrels, molds, lasts, patterns,

specialty containers, pallets, shells; and tire molds, and accessory parts such as rings and

insert plates used in activities as dened in class 30.1. Does not include tire building drums

and accessory parts and general purpose small tools such as wrenches and drills, both power

and hand-driven, and other general purpose equipment such as conveyors and transfer

equipment.

Manufacture of Finished Plastic Products:

Includes assets used in the manufacture of plastics products and the molding of primary

plastics for the trade. Does not include assets used in the manufacture of basic plastics

materials nor the manufacture of phonograph records.

Manufacture of Finished Plastic Products—Special Tools:

Includes assets dened as special tools, such as jigs, dies, xtures, molds, patterns, gauges,

and specialty transfer and shipping devices, used in activities as dened in class 30.2. Special

tools are specically designed for the production or processing of particular parts and have no

signicant utilitarian value and cannot be adapted to further or different use after changes or

improvements are made in the model design of the particular part produced by the special

tools. Does not include general purpose small tools such as wrenches and drills, both hand and

power-driven, and other general purpose equipment such as conveyors, transfer equipment,

and materials handling devices.

Manufacture of Leather and Leather Products:

Includes assets used in the tanning, currying, and nishing of hides and skins; the processing

of fur pelts; and the manufacture of nished leather products, such as footwear, belting,

apparel, and luggage.

Manufacture of Glass Products:

Includes assets used in the production of at, blown, or pressed products of glass, such as

oat and window glass, glass containers, glassware, and berglass. Does not include assets

used in the manufacture of lenses.

Manufacture of Glass Products—Special Tools:

Includes assets dened as special tools such as molds, patterns, pallets, and specialty transfer

and shipping devices such as steel racks to transport automotive glass, used in activities as

dened in class 32.1. Special tools are specically designed for the production or processing of

particular parts and have no signicant utilitarian value and cannot be adapted to further or

different use after changes or improvements are made in the model design of the particular

part produced by the special tools. Does not include general purpose small tools such as wrenches and drills, both hand and power-driven, and other general purpose equipment such

as conveyors, transfer equipment, and materials handling devices.

Manufacture of Cement:

Includes assets used in the production of cement, but does not include assets used in the

manufacture of concrete and concrete products nor in any mining or extraction process.

Manufacture of Other Stone and Clay Products:

Includes assets used in the manufacture of products from materials in the form of clay and

stone, such as brick, tile, and pipe; pottery and related products, such as vitreous-china,

plumbing xtures, earthenware, and ceramic insulating materials; and also includes assets used

in manufacture of concrete and concrete products. Does not include assets used in any mining

or extraction processes.

100 Publication 946 (2023)
Table B-2.

Asset

class Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

Manufacture of Primary Nonferrous Metals:

14 7 14

33.2

Includes assets used in the smelting, rening, and electrolysis of nonferrous metals from ore,

pig, or scrap, the rolling, drawing, and alloying of nonferrous metals; the manufacture of

castings, forgings, and other basic products of nonferrous metals; and the manufacture of

nails, spikes, structural shapes, tubing, wire, and cable.

33.21

33.3

33.4

34.0

34.01

35.0

36.0

36.1

Manufacture of Primary Nonferrous Metals—Special Tools:

Includes assets dened as special tools such as dies, jigs, molds, patterns, xtures, gauges,

and drawings concerning such special tools used in the activities as dened in class 33.2,

Manufacture of Primary Nonferrous Metals. Special tools are specically designed for the

production or processing of particular products or parts and have no signicant utilitarian value

and cannot be adapted to further or different use after changes or improvements are made in

the model design of the particular part produced by the special tools. Does not include general

purpose small tools such as wrenches and drills, both hand and power-driven, and other

general purpose equipment such as conveyors, transfer equipment, and materials handling

devices. Rolls, mandrels, and refractories are not included in class 33.21 but are included in

class 33.2.

Manufacture of Foundry Products:

Includes assets used in the casting of iron and steel, including related operations such as

molding and coremaking. Also includes assets used in the nishing of castings and

patternmaking when performed at the foundry, all special tools, and related land improvements.

Manufacture of Primary Steel Mill Products:

Includes assets used in the smelting, reduction, and rening of iron and steel from ore, pig, or

scrap; the rolling, drawing, and alloying of steel; the manufacture of nails, spikes, structural

shapes, tubing, wire, and cable. Includes assets used by steel service centers and ferrous metal

forges, and assets used in coke production, regardless of ownership. Also includes related land

improvements and all special tools used in the above activities.

Manufacture of Fabricated Metal Products:

Includes assets used in the production of metal cans, tinware, fabricated structural metal

products, metal stampings, and other ferrous and nonferrous metal and wire products not

elsewhere classied. Does not include assets used to manufacture non-electric heating

apparatus.

Manufacture of Fabricated Metal Products—Special Tools:

Includes assets dened as special tools such as dies, jigs, molds, patterns, xtures, gauges,

and returnable containers and drawings concerning such special tools used in the activities as

dened in class 34.0. Special tools are specically designed for the production or processing of

particular machine components, products, or parts, and have no signicant utilitarian value and

cannot be adapted to further or different use after changes or improvements are made in the

model design of the particular part produced by the special tools. Does not include general

small tools such as wrenches and drills, both hand and power-driven, and other general

purpose equipment such as conveyors, transfer equipment, and materials handling devices.

Manufacture of Electrical and Non-Electrical Machinery and Other Mechanical Products:

Includes assets used to manufacture or rebuild nished machinery and equipment and

replacement parts thereof such as machine tools, general industrial and special industry

machinery, electrical power generation, transmission, and distribution systems, space heating,

cooling, and refrigeration systems, commercial and home appliances, farm and garden

machinery, construction machinery, mining and oil eld machinery, internal combustion engines

(except those elsewhere classied), turbines (except those that power airborne vehicles),

batteries, lamps and lighting xtures, carbon and graphite products, and electromechanical and

mechanical products including business machines, instruments, watches and clocks, vending

and amusement machines, photographic equipment, medical and dental equipment and

appliances, and ophthalmic goods. Includes assets used by manufacturers or rebuilders of

such nished machinery and equipment in activities elsewhere classied such as the

manufacture of castings, forgings, rubber and plastic products, electronic subassemblies or

other manufacturing activities if the interim products are used by the same manufacturer

primarily in the manufacture, assembly, or rebuilding of such nished machinery and

equipment. Does not include assets used in mining, assets used in the manufacture of primary

ferrous and nonferrous metals, assets included in class 00.11 through 00.4, and assets

elsewhere classied.

Manufacture of Electronic Components, Products, and Systems:

Includes assets used in the manufacture of electronic communication, computation,

instrumentation and control system, including airborne applications; also includes assets used

in the manufacture of electronic products such as frequency and amplitude modulated

transmitters and receivers, electronic switching stations, television cameras, video recorders,

record players and tape recorders, computers and computer peripheral machines, and

electronic instruments, watches, and clocks; also includes assets used in the manufacture of

components, provided their primary use is products and systems dened above such as

electron tubes, capacitors, coils, resistors, printed circuit substrates, switches, harness cables,

lasers, ber optic devices, and magnetic media devices. Specically excludes assets used to

manufacture electronic products and components, photocopiers, typewriters, postage meters

and other electromechanical and mechanical business machines and instruments that are elsewhere classied. Does not include semiconductor manufacturing equipment included in

class 36.1.

Any Semiconductor Manufacturing Equipment

6.5 5 6.5

14 7 14

15 7 15

12 7 12

3 3 3

10 7 10

6 5 6

5 5 5

Publication 946 (2023) 101
Table B-2.

Asset

class Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

Manufacture of Motor Vehicles:

12 7 12

37.11

Includes assets used in the manufacture and assembly of nished automobiles, trucks, trailers,

motor homes, and buses. Does not include assets used in mining, printing and publishing,

production of primary metals, electricity, or steam, or the manufacture of glass, industrial

chemicals, batteries, or rubber products, which are classied elsewhere. Includes assets used

in manufacturing activities elsewhere classied other than those excluded above, where such

activities are incidental to and an integral part of the manufacture and assembly of nished

motor vehicles such as the manufacture of parts and subassemblies of fabricated metal

products, electrical equipment, textiles, plastics, leather, and foundry and forging operations.

Does not include any assets not classied in manufacturing activity classes, for example, does

not include any assets classied in asset guideline classes 00.11 through 00.4. Activities will be

considered incidental to the manufacture and assembly of nished motor vehicles only if 75%

or more of the value of the products produced under one roof are used for the manufacture 

and assembly of nished motor vehicles. Parts that are produced as a normal replacement 

stock complement in connection with the manufacture and assembly of nished motor 

vehicles are considered used for the manufacture assembly of nished motor vehicles.

Does not include assets used in the manufacture of component parts if these assets are used

by taxpayers not engaged in the assembly of nished motor vehicles.

37.12

37.2

37.31

37.32

37.33

37.41

37.42

39.0

Manufacture of Motor Vehicles—Special Tools:

Includes assets dened as special tools, such as jigs, dies, xtures, molds, patterns, gauges,

and specialty transfer and shipping devices, owned by manufacturers of nished motor vehicles

and used in qualied activities as dened in class 37.11. Special tools are specically designed

for the production or processing of particular motor vehicle components and have no

signicant utilitarian value, and cannot be adapted to further or different use, after changes or improvements are made in the model design of the particular part produced by the special

tools. Does not include general purpose small tools such as wrenches and drills, both hand and

power-driven, and other general purpose equipment such as conveyors, transfer equipment, and

materials handling devices.

Manufacture of Aerospace Products:

Includes assets used in the manufacture and assembly of airborne vehicles and their component

parts including hydraulic, pneumatic, electrical, and mechanical systems. Does not include assets

used in the production of electronic airborne detection, guidance, control, radiation, computation,

test, navigation, and communication equipment or the components thereof.

Ship and Boat Building Machinery and Equipment:

Includes assets used in the manufacture and repair of ships, boats, caissons, marine drilling

rigs, and special fabrications not included in asset classes 37.32 and 37.33. Specically

includes all manufacturing and repairing machinery and equipment, including machinery and

equipment used in the operation of assets included in asset class 37.32. Excludes buildings

and their structural components.

Ship and Boat Building Dry Docks and Land Improvements:

Includes assets used in the manufacture and repair of ships, boats, caissons, marine drilling

rigs, and special fabrications not included in asset classes 37.31 and 37.33. Specically

includes oating and xed dry docks, ship basins, graving docks, shipways, piers, and all other

land improvements such as water, sewer, and electric systems. Excludes buildings and their

structural components.

Ship and Boat Building—Special Tools:

Includes assets dened as special tools such as dies, jigs, molds, patterns, xtures, gauges,

and drawings concerning such special tools used in the activities dened in classes 37.31 and

37.32. Special tools are specically designed for the production or processing of particular

machine components, products, or parts, and have no signicant utilitarian value and cannot

be adapted to further or different use after changes or improvements are made in the model

design of the particular part produced by the special tools. Does not include general purpose

small tools such as wrenches and drills, both hand and power-driven, and other general

purpose equipment such as conveyors, transfer equipment, and materials handling devices.

Manufacture of Locomotives:

Includes assets used in building or rebuilding railroad locomotives (including mining and

industrial locomotives). Does not include assets of railroad transportation companies or assets

of companies which manufacture components of locomotives but do not manufacture nished

locomotives.

Manufacture of Railroad Cars:

Includes assets used in building or rebuilding railroad freight or passenger cars (including rail

transit cars). Does not include assets of railroad transportation companies or assets of

companies which manufacture components of railroad cars but do not manufacture nished

railroad cars.

Manufacture of Athletic, Jewelry, and Other Goods:

Includes assets used in the production of jewelry; musical instruments; toys and sporting

goods; motion picture and television lms and tapes; and pens, pencils, ofce and art supplies,

brooms, brushes, caskets, etc.

Railroad Transportation:

Classes with the prex 40 include the assets identied below that are used in the commercial

and contract carrying of passengers and freight by rail. Assets of electried railroads will be

classied in a manner corresponding to that set forth below for railroads not independently

operated as electric lines. Excludes the assets included in classes with the prex beginning

00.1 and 00.2 above, and also excludes any non-depreciable assets included in Interstate

Commerce Commission accounts enumerated for this class.

3 3 3

10 7 10

12 7 12

16 10 16

6.5 5 6.5

11.5 7 11.5

12 7 12

12 7 12

102 Publication 946 (2023)
Table B-2.

Asset

class Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

Railroad Machinery and Equipment:

14 7 14

40.1

Includes assets classied in the following Interstate Commerce Commission accounts:

Roadway accounts:

(16) Station and ofce buildings (freight handling machinery and equipment only)

TOFC/COFC terminals (freight handling machinery and equipment only)

Communication systems

Signals and interlockers

Roadway machines

Shop machinery

Equipment accounts:

Locomotives

Freight train cars

Passenger train cars

Work equipment

(25)

(26)

(27)

(37)

(44)

(52)

(53)

(54)

(57)

40.2 Railroad Structures and Similar Improvements:

Includes assets classied in the following Interstate Commerce Commission road accounts:

(6)

(7)

(13)

(16)

(17)

(18)

(19)

(20)

(25)

(31)

(35)

(39)

Bridges, trestles, and culverts

Elevated structures

Fences, snowsheds, and signs

Station and ofce buildings (stations and other operating structures only)

Roadway buildings

Water stations

Fuel stations

Shops and enginehouses

TOFC/COFC terminals (operating structures only)

Power transmission systems

Miscellaneous structures

Public improvements construction

30 20 30

40.3 Railroad Wharves and Docks:

Includes assets classied in the following Interstate Commission Commerce accounts:

Wharves and docks

Coal and ore wharves

(23)

(24)

20 15 20

40.4

40.51

40.52

40.53

40.54

41.0

42.0

44.0

45.0

45.1

46.0

Railroad Track

Railroad Hydraulic Electric Generating Equipment

Railroad Nuclear Electric Generating Equipment

Railroad Steam Electric Generating Equipment

Railroad Steam, Compressed Air, and Other Power Plan Equipment

Motor Transport—Passengers:

Includes assets used in the urban and interurban commercial and contract carrying of

passengers by road, except the transportation assets included in classes with the prex 00.2.

Motor Transport—Freight:

Includes assets used in the commercial and contract carrying of freight by road, except the

transportation assets included in classes with the prex 00.2.

Water Transportation:

Includes assets used in the commercial and contract carrying of freight and passengers by

water except the transportation assets included in classes with the prex 00.2. Includes all

related land improvements.

Air Transport:

Includes assets (except helicopters) used in commercial and contract carrying of passengers

and freight by air. For purposes of section 1.167(a)-11(d)(2)(iv)(a) of the regulations,

expenditures for “repair, maintenance, rehabilitation, or improvement” shall consist of direct

maintenance expenses (irrespective of airworthiness provisions or charges) as dened by Civil

Aeronautics Board uniform accounts 5200, maintenance burden (exclusive of expenses

pertaining to maintenance buildings and improvements) as dened by Civil Aeronautics Board

accounts 5300, and expenditures which are not “excluded additions” as dened in section

1.167(a)-11(d)(2)(vi) of the regulations and which would be charged to property and equipment

accounts in the Civil Aeronautics Board uniform system of accounts.

Air Transport (restricted):

Includes each asset described in the description of class 45.0 which was held by the taxpayer on April 15, 1976, or is acquired by the taxpayer pursuant to a contract which was, on April 15,

1976, and at all times thereafter, binding on the taxpayer. This criterion of classication based

on binding contract concept is to be applied in the same manner as under the general rules

expressed in sections 49(b)(1), (4), (5), and (8) of the Code (as in effect prior to its repeal by the

Revenue Act of 1978, section 312(c)(1), (d), 1978-3 C.B. 1, 60).

Pipeline Transportation:

Includes assets used in the private, commercial, and contract carrying of petroleum, gas, and

other products by means of pipes and conveyors. The trunk lines and related storage facilities

of integrated petroleum and natural gas producers are included in this class. Excludes initial

clearing and grading land improvements as specied in Rev. Rul. 72-403, 1972-2 C.B. 102, but

includes all other related land improvements.

10 7 10

50 20 50

20 15 20

28 20 28

28 20 28

8 5 8

8 5 8

20 15 20

12 7 12

22 15 22

6 5 6

Publication 946 (2023) 103
Table B-2.

Asset

class Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

Telephone Communications:

45 20 45

48.11

Includes the assets classied below and that are used in the provision of commercial and

contract telephonic services such as:

48.12

48.121

48.13

48.14

48.2

48.31

48.32

48.33

48.34

48.35

48.36

48.37

48.38

48.39

Telephone Central Office Buildings:

Includes assets intended to house central ofce equipment, as dened in Federal

Communications Commission Part 31 Account No. 212 whether section 1245 or section 1250

property.

Telephone Central Office Equipment:

Includes central ofce switching and related equipment as dened in Federal Communications

Commission Part 31 Account No. 221.

Does not include computer-based telephone central ofce switching equipment included in

class 48.121. Does not include private branch exchange (PBX) equipment.

Computer-Based Telephone Central Office Switching Equipment:

Includes equipment whose functions are those of a computer or peripheral equipment (as

dened in section 168(i)(2)(B) of the Code) used in its capacity as telephone central ofce

equipment. Does not include private exchange (PBX) equipment.

Telephone Station Equipment:

Includes such station apparatus and connections as teletypewriters, telephones, booths, private

exchanges, and comparable equipment as dened in Federal Communications Commission

Part 31 Account No. 231, 232, and 234.

Telephone Distribution Plant:

Includes such assets as pole lines, cable, aerial wire, underground conduits, and comparable

equipment, and related land improvements as dened in Federal Communications Commission

Part 31 Account Nos. 241, 242.1, 242.2, 242.3, 242.4, 243, and 244.

Radio and Television Broadcastings:

Includes assets used in radio and television broadcasting, except transmitting towers.

Telegraph, Ocean Cable, and Satellite Communications (TOCSC) includes

communications-related assets used to provide domestic and international radio-telegraph,

wire-telegraph, ocean-cable, and satellite communications services; also includes related land

improvements. If property described in classes 48.31–48.45 is comparable to telephone

distribution plant described in class 48.14 and used for 2-way exchange of voice and data

communication which is the equivalent of telephone communication, such property is assigned

a class life of 24 years under this revenue procedure. Comparable equipment does not include

cable television equipment used primarily for 1-way communication.

TOCSC—Electric Power Generating and Distribution Systems:

Includes assets used in the provision of electric power by generation, modulation, rectication,

channelization, control, and distribution. Does not include these assets when they are installed

on customers’ premises.

TOCSC—High Frequency Radio and Microwave Systems:

Includes assets such as transmitters and receivers, antenna supporting structures, antennas,

transmission lines from equipment to antenna, transmitter cooling systems, and control and

amplication equipment. Does not include cable and long-line systems.

TOCSC—Cable and Long-Line Systems:

Includes assets such as transmission lines, pole lines, ocean cables, buried cable and conduit,

repeaters, repeater stations, and other related assets. Does not include high frequency radio or

microwave systems.

TOCSC—Central Office Control Equipment:

Includes assets for general control, switching, and monitoring of communications signals

including electromechanical switching and channeling apparatus, multiplexing equipment

patching and monitoring facilities, in-house cabling, teleprinter equipment, and associated site

improvements.

TOCSC—Computerized Switching, Channeling, and Associated Control Equipment:

Includes central ofce switching computers, interfacing computers, other associated specialized

control equipment, and site improvements.

TOCSC—Satellite Ground Segment Property:

Includes assets such as xed earth station equipment, antennas, satellite communications

equipment, and interface equipment used in satellite communications. Does not include general

purpose equipment or equipment used in satellite space segment property.

TOCSC—Satellite Space Segment Property:

Includes satellites and equipment used for telemetry, tracking, control, and monitoring when

used in satellite communications.

TOCSC—Equipment Installed on Customer’s Premises:

Includes assets installed on customer’s premises, such as computers, terminal equipment,

power generation and distribution systems, private switching center, teleprinters, facsimile

equipment, and other associated and related equipment.

TOCSC—Support and Service Equipment:

Includes assets used to support but not engage in communications. Includes store, warehouse

and shop tools, and test and laboratory assets.

Cable Television (CATV): Includes communications-related assets used to provide cable

television community antenna television services. Does not include assets used to provide

subscribers with 2-way communications services.

18 10 18

9.5 5

10 7*

24 15

6 5

19 10

13 7

26.5 20

16.5 10

10.5 7

10 7

8 5

10 7

13.5 7

9.5

10*

24

6

19

13

26.5

16.5

10.5

10

8

10

13.5

* Property described in asset guideline class 48.13 which is qualied technological equipment as dened in section 168(i)(2) is assigned a 5-year recovery period.

104 Publication 946 (2023)
Table B-2.

Asset

class Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

CATV—Headend:

11 7

48.41

Includes assets such as towers, antennas, preampliers, converters, modulation equipment, and program

non-duplication systems. Does not include headend buildings and program origination assets.

48.42

48.43

48.44

48.45

49.11

49.12

49.121

49.13

49.14

49.15

49.21

49.221

49.222

49.223

49.23

49.24

49.25

CATV—Subscriber Connection and Distribution Systems:

Includes assets such as trunk and feeder cable, connecting hardware, ampliers, power

equipment, passive devices, directional taps, pedestals, pressure taps, drop cables, matching

transformers, multiple set connector equipment, and convertors.

10 7

CATV—Program Origination:

Includes assets such as cameras, lm chains, videotape recorders, lighting, and remote location

equipment excluding vehicles. Does not include buildings and their structural components.

CATV—Service and Test:

Includes assets such as oscilloscopes, eld strength meters, spectrum analyzers, and cable

testing equipment, but does not include vehicles.

CATV—Microwave Systems:

Includes assets such as towers, antennas, transmitting and receiving equipment, and broad

band microwave assets used in the provision of cable television services. Does not include

assets used in the provision of common carrier services.

Electric, Gas, Water, and Steam Utility Services:

Includes assets used in the production, transmission and distribution of electricity, gas, steam,

or water for sale including related land improvements.

Electric Utility Hydraulic Production Plant:

Includes assets used in the hydraulic power production of electricity for sale, including related

land improvements, such as dams, umes, canals, and waterways.

Electric Utility Nuclear Production Plant:

Includes assets used in the nuclear power production and electricity for sale and related land

improvements. Does not include nuclear fuel assemblies.

Electric Utility Nuclear Fuel Assemblies:

Includes initial core and replacement core nuclear fuel assemblies (i.e., the composite of fabricated nuclear

fuel and container) when used in a boiling water, pressurized water, or high temperature gas reactor used in

the production of electricity. Does not include nuclear fuel assemblies used in breader reactors.

Electric Utility Steam Production Plant:

Includes assets used in the steam power production of electricity for sale, combustion turbines operated in a

combined cycle with a conventional steam unit and related land improvements. Also includes package

boilers, electric generators, and related assets, such as, electricity and steam distribution systems as used by

a waste reduction and resource recovery plant if the steam or electricity is normally for sale to others.

Electric Utility Transmission and Distribution Plant:

Includes assets used in the transmission and distribution of electricity for sale and related land

improvements. Excludes initial clearing and grading land improvements as specied in Rev. Rul.

72-403, 1972-2 C.B. 102.

Electric Utility Combustion Turbine Production Plant:

Includes assets used in the production of electricity for sale by the use of such prime movers as jet

engines, combustion turbines, diesel engines, gasoline engines, and other internal combustion

engines, their associated power turbines and/or generators, and related land improvements. Does not

include combustion turbines operated in a combined cycle with a conventional steam unit.

Gas Utility Distribution Facilities:

Includes gas water heaters and gas conversion equipment installed by utility on customers’

premises on a rental basis.

Gas Utility Manufactured Gas Production Plants:

Includes assets used in the manufacture of gas having chemical and/or physical properties

which do not permit complete interchangeability with domestic natural gas. Does not include

gas-producing systems and related systems used in waste reduction and resource recovery

plants which are elsewhere classied.

Gas Utility Substitute Natural Gas (SNG) Production Plant (naphtha or lighter hydrocarbon

feedstocks):

Includes assets used in the catalytic conversion of feedstocks or naphtha or lighter

hydrocarbons to a gaseous fuel which is completely interchangeable with domestic natural gas.

Substitute Natural Gas—Coal Gasification:

Includes assets used in the manufacture and production of pipeline quality gas from coal using the basic Lurgi

process with advanced methanation. Includes all process plant equipment and structures used in this coal

gasication process and all utility assets such as cooling systems, water supply and treatment facilities, and

assets used in the production and distribution of electricity and steam for use by the taxpayer in a gasication

plant and attendant coal mining site processes but not for assets used in the production and distribution of

electricity and steam for sale to others. Also includes all other related land improvements. Does not include

assets used in the direct mining and treatment of coal prior to the gasication process itself.

Natural Gas Production Plant

Gas Utility Trunk Pipelines and Related Storage Facilities:

Excluding initial clearing and grading land improvements as specied in Rev. Rul. 72-40.

Liquefied Natural Gas Plant:

Includes assets used in the liquefaction, storage, and regasication of natural gas including

loading and unloading connections, instrumentation equipment and controls, pumps, vaporizers

and odorizers, tanks, and related land improvements. Also includes pipeline interconnections

with gas transmission lines and distribution systems and marine terminal facilities.

9 5

8.5 5

9.5 5

50 20

20 15

5 5

28 20

30 20

20 15

35 20

30 20

14 7

18 10

22 15

22 15

14 7

9

8.5

9.5

50

20

5

28

30

20

35

30

14

18

22

22

14

10

11

Publication 946 (2023) 105
Table B-2.

Asset

class Description of assets included

Table of Class Lives and Recovery Periods

Recovery Periods

(in years)

Class Life

(in years)

GDS

(MACRS) ADS

Water Utilities:

50 20*** 50

49.3

Includes assets used in the gathering, treatment, and commercial distribution of water.

49.4

49.5

50.0

51.0

57.0

57.1

79.0

80.0

Central Steam Utility Production and Distribution:

Includes assets used in the production and distribution of steam for sale. Does not include

assets used in waste reduction and resource recovery plants which are elsewhere classied.

Waste Reduction and Resource Recovery Plants:

Includes assets used in the conversion of refuse or other solid waste or biomass to heat or to a

solid, liquid, or gaseous fuel. Also includes all process plant equipment and structures at the

site used to receive, handle, collect, and process refuse or other solid waste or biomass in a waterwall, combustion system, oil or gas pyrolysis system, or refuse-derived fuel system to

create hot water, gas, steam, and electricity. Includes material recovery and support assets

used in refuse or solid refuse or solid waste receiving, collecting, handling, sorting, shredding,

classifying, and separation systems. Does not include any package boilers, or electric

generators and related assets such as electricity, hot water, steam, and manufactured gas

production plants classied in classes 00.4, 49.13, 49.221, and 49.4. Does include, however, all

other utilities such as water supply and treatment facilities, ash handling, and other related land

improvements of a waste reduction and resource recovery plant.

Municipal Wastewater Treatment Plant

Municipal Sewer

Distributive Trades and Services:

Includes assets used in wholesale and retail trade, and personal and professional services.

Includes section 1245 assets used in marketing petroleum and petroleum products.

Distributive Trades and Services—Billboard, Service Station Buildings, and Petroleum

Marketing Land Improvements:

Includes section 1250 assets, including service station buildings and depreciable land

improvements, whether section 1245 property or section 1250 property, used in the marketing

of petroleum and petroleum products, but not including any of these facilities related to

petroleum and natural gas trunk pipelines. Includes car wash buildings and related land

improvements. Includes billboards, whether such assets are section 1245 property or section

1250 property. Excludes all other land improvements, buildings, and structural components as

dened in section 1.48-1(e) of the regulations.

Recreation:

Includes assets used in the provision of entertainment services on payment of a fee or admission charge, as in the operation of bowling alleys, billiard and pool establishments,

theaters, concert halls, and miniature golf courses. Does not include amusement and theme

parks and assets which consist primarily of specialized land improvements or structures, such

as golf courses, sports stadia, race tracks, ski slopes, and buildings which house the assets

used in entertainment services.

Theme and Amusement Parks:

Includes assets used in the provision of rides, attractions, and amusements in activities dened as theme

and amusement parks, and includes appurtenances associated with a ride, attraction, amusement, or theme

setting within the park such as ticket booths, facades, shop interiors, and props, special purpose structures,

and buildings other than warehouses, administration buildings, hotels, and motels. Includes all land

improvements for or in support of park activities (for example, parking lots, sidewalks, waterways, bridges,

fences, landscaping, etc.), and support functions (for example, food and beverage retailing, souvenir vending,

and other nonlodging accommodations) if owned by the park and provided exclusively for the benet of park

patrons. Theme and amusement parks are dened as combinations of amusements, rides, and attractions

which are permanently situated on park land and open to the public for the price of admission. This guideline

class is a composite of all assets used in this industry except transportation equipment (general purpose

airplanes, etc., which are included in asset guideline classes with the prex 00.2); assets used in the

trucks, cars,provision of administrative services (asset classes with the prex 00.1) and warehouses,

administration buildings, hotels, and motels.

Certain Property for Which Recovery Periods Assigned

A. Personal Property With No Class Life

Section 1245 Real Property With No Class Life

B. Qualied Technological Equipment, as dened in section 168(i)(2).

C. Property Used in Connection with Research and Experimentation referred to in section

168(e)(3)(B).

D. Alternative energy property described in sections 48(l)(3)(A)(ix) (as in effect on the day before

the date of enactment (11/5/90) of the Revenue Reconciliation Act of 1990).

E. Biomass property described in section 48(l)(15) (as in effect on the day before the date of

enactment (11/5/90) of the Revenue Reconciliation Act of 1990) and is a qualifying small

production facility within the meaning of section 3(17)(c) of the Federal Power Act (16 U.S.C.

796(17)(C)), as in effect on September 1, 1986.

 * Any high technology medical equipment as dened in section 168(i)(2)(C) which is described in asset guideline class 57.0 is assigned a 5-year

recovery period for the alternate MACRS method.

 ** The class life (if any) of property described in class B, C, D, E, or F is determined by reference to the asset guideline classes. If an item of property

described in paragraph B, C, D, E, or F is not described in any asset guideline class, such item of property has no class life.

*** Use straight line over 25 years if placed in service after June 12, 1996, unless placed in service under a binding contract in effect before June 10,

1996, and at all times until placed in service.

28 20

10 7

24 15

50 20***

9 5

20 15

10 7

12.5 7

28

10

24

50

9*

20

10

12.5

7 12

7 40

** 5 5

** 5 class life if

no class

life—12

** 5

** 5

class life if no class

life—12

class life if

no class

life—12

F. Energy property described in section 48(a)(3)(A) (or would be described if “solar or wind

energy” were substituted for “solar energy” in section 48(a)(3)(A)(i)).

** 5 class life if

no class

life—12

106 Publication 946 (2023)
Glossary

Abstract fees: Expenses generally 

paid by a buyer to research the title of 

real property.

Active conduct of a trade or business: Generally, for the section 179 

deduction, a taxpayer is considered to 

conduct a trade or business actively if 

they meaningfully participate in the 

management or operations of the trade 

or business. A mere passive investor in 

a trade or business does not actively 

conduct the trade or business.

Adjusted basis: The original cost of 

property, plus certain additions and improvements, minus certain deductions 

such as depreciation allowed or allowable and casualty losses.

Amortization: A ratable deduction for 

the cost of intangible property over its 

useful life.

Amount realized: The total of all 

money received plus the fair market 

value of all property or services received from a sale or exchange. The 

amount realized also includes any liabilities assumed by the buyer and any 

liabilities to which the property transferred is subject, such as real estate taxes 

or a mortgage.

Basis: A measure of an individual's investment in property for tax purposes.

Business/investment use: Usually, a 

percentage showing how much an item 

of property, such as an automobile, is 

used for business and investment purposes.

Capitalized: Expended or treated as 

an item of a capital nature. A capitalized amount is not deductible as a current expense and must be included in 

the basis of property.

Circumstantial evidence: Details or 

facts which indirectly point to other 

facts.

Class life: A number of years that establishes the property class and recovery period for most types of property 

under the General Depreciation 

System (GDS) and Alternative Depreciation System (ADS).

Commuting: Travel between a personal home and work or job site within 

the area of an individual's tax home.

Convention: A method established 

under the Modified Accelerated Cost 

Recovery System (MACRS) to determine the portion of the year to depreciate property both in the year the property is placed in service and in the year 

of disposition.

Declining balance method: An accelerated method to depreciate property. The GDS of MACRS uses the 

150% and 200% declining balance 

methods for certain types of property. A 

depreciation rate (percentage) is determined by dividing the declining balance percentage by the recovery period for the property.

Disposition: The permanent withdrawal from use in a trade or business 

or from the production of income.

Documentary evidence: Written records that establish certain facts.

Exchange: To barter, swap, part with, 

give, or transfer property for other property or services.

Fair market value (FMV): The price 

that property brings when it is offered 

for sale by one who is willing but not 

obligated to sell, and is bought by one 

who is willing or desires to buy but is 

not compelled to do so.

Fiduciary: The one who acts on behalf of another as a guardian, trustee, 

executor, administrator, receiver, or 

conservator.

Fungible commodity: A commodity 

of a nature that one part may be used 

in place of another part.

Goodwill: An intangible property such 

as the advantage or benefit received in 

property beyond its mere value. It is not 

confined to a name but can also be attached to a particular area where 

business is transacted, to a list of customers, or to other elements of value in 

business as a going concern.

Grantor: The one who transfers property to another.

Improvement: An addition to or partial replacement of property that adds 

to its value, appreciably lengthens the 

time you can use it, or adapts it to a different use.

Intangible property: Property that 

has value but cannot be seen or 

touched, such as goodwill, patents, 

copyrights, and computer software.

Listed property: Passenger automobiles; any other property used for transportation; and property of a type generally used for entertainment, recreation, 

or amusement.

Nonresidential real property: Most 

real property other than residential 

rental property.

Placed in service: Ready and available for a specific use whether in a trade 

or business, the production of income, 

a tax-exempt activity, or a personal activity.

Property class: A category for property under MACRS. It generally determines the depreciation method, recovery period, and convention.

Recapture: To include as income on 

your return an amount allowed or allowable as a deduction in a prior year.

Recovery period: The number of 

years over which the basis of an item of 

property is recovered.

Remainder interest: That part of an 

estate that is left after all the other provisions of a will have been satisfied.

Residential rental property: Real 

property, generally buildings or structures, if 80% or more of its annual 

gross rental income is from dwelling 

units.

Publication 946 (2023) 107
Salvage value: An estimated value of 

property at the end of its useful life. Not 

used under MACRS.

Section 1245 property: Property that 

is or has been subject to an allowance 

for depreciation or amortization. Section 1245 property includes personal 

property, single-purpose agricultural 

and horticultural structures, storage facilities used in connection with the distribution of petroleum or primary products of petroleum, and railroad grading 

or tunnel bores.

Section 1250 property: Real property (other than section 1245 property) 

which is or has been subject to an allowance for depreciation.

Standard mileage rate: The established amount for optional use in determining a tax deduction for automobiles 

instead of deducting depreciation and 

actual operating expenses.

Straight line method: A way to figure 

depreciation for property that ratably 

deducts the same amount for each 

year in the recovery period. The rate (in 

percentage terms) is determined by dividing 1 by the number of years in the 

recovery period.

Structural components: Parts that 

together form an entire structure, such 

as a building. The term includes those 

parts of a building such as walls, partitions, floors, and ceilings, as well as 

any permanent coverings such as paneling or tiling, windows and doors, and 

all components of a central air conditioning or heating system including motors, compressors, pipes, and ducts. It 

also includes plumbing fixtures such as 

sinks, bathtubs, electrical wiring and 

lighting fixtures, and other parts that 

form the structure.

Tangible property: Property you can 

see or touch, such as buildings, machinery, vehicles, furniture, and equipment.

Tax-exempt: Not subject to tax.

Term interest: A life interest in property, an interest in property for a term of 

years, or an income interest in a trust. It 

generally refers to a present or future 

interest in income from property or the 

right to use property that terminates or 

fails upon the lapse of time, the occurrence of an event, or the failure of an 

event to occur.

Unadjusted basis: The basis of an 

item of property for purposes of figuring gain on a sale without taking into 

account any depreciation taken in earlier years but with adjustments for other 

amounts, including amortization, the 

section 179 deduction, any special depreciation allowance, any deduction 

claimed for clean-fuel vehicles or 

clean-fuel vehicle refueling property 

placed in service before January 1, 

2006, and any electric vehicle credit.

Unit-of-production method: A way 

to figure depreciation for certain property. It is determined by estimating the 

number of units that can be produced 

before the property is worn out. For example, if it is estimated that a machine 

will produce 1,000 units before its useful life ends, and it actually produces 

100 units in a year, the percentage to 

figure depreciation for that year is 10% 

of the machine's cost less its salvage 

value.

Useful life: An estimate of how long 

an item of property can be expected to 

be usable in trade or business or to 

produce income.

108 Publication 946 (2023)
To help us develop a more useful index, please let us know if you have ideas for index entries.

Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A

Addition to property 32

Adjusted basis 12

Alternative Depreciation System (ADS):

Recovery periods 32

Required use 27

Amended return 13

Apartment:

Cooperative 4

Rental 29

Assistance (See Tax help)

Automobile (See Passenger automobile)

B

Basis:

Adjustments 12, 21, 36

Basis for depreciation 31

Casualty loss 36

Change in use 12

Cost 11

Depreciable basis 25

Other than cost 12

Recapture of clean-fuel vehicle deduction or 

credit 36

Term interest 6

Unadjusted 36

Business use of property, partial 5

Business-use limit, recapture of Section 179 

deduction 22

Business-use requirement, listed 

property 53

C

Car (See Passenger automobile)

Carryover of section 179 deduction 20

Casualty loss, effect of 36

Changing accounting method 13

Communication equipment (See Listed 

property)

Commuting 54

Computer software 10, 16

Containers 5

Conventions 32

Cooperative apartment 4

Copyright 10

(See also Section 197 intangibles)

Correcting depreciation deductions 13

Cost basis 11

D

Declining balance:

Method 39

Rates 39

Deduction limit:

Automobile 57

Section 179 17

Depreciation:

Deduction:

Employee 52

Listed property 52

Determinable useful life 5

Excepted property 6

Incorrect amount deducted 13

Methods 33

Property lasting more than one year 6

Property owned 4

Property used in business 5

Recapture 50, 55

Depreciation allowable 12

Depreciation allowed 12

Depreciation deduction:

Listed property 53

Determinable useful life 5

Disposition:

Before recovery period ends 38

General asset account property 46

Section 179 deduction 22

E

Election:

ADS 27, 34

Declining balance (150% DB) method 34

Exclusion from MACRS 11

General asset account 49

Not to claim special depreciation 

allowance 26

Section 179 deduction 21

Straight line method 34

Electric vehicle 59

Employee:

Depreciation deduction 52

How to claim depreciation 13

Employee deduction, listed property 52

Exchange of MACRS property 42

F

Farm:

Property 33

Figuring MACRS:

Using percentage tables 34

Without using percentage tables 39

Films 10

G

General asset account:

Abusive transaction 48

Disposing of property 46

Grouping property in 46

Nonrecognition transaction 48

General Depreciation System (GDS), 

recovery periods 31

Gift (See Basis, other than cost)

Glossary 107

I

Idle property 7

Improvements 12, 32

Income forecast method 10

Incorrect depreciation deductions 13

index 7, 11, 13, 15, 17, 25, 46, 50, 61

Index 6

Inheritance (See Basis, other than cost)

Intangible property:

Depreciation method 9, 10

Income forecast method 10

Straight line method 9

Inventory 5

Investment use of property, partial 5

Involuntary conversion of MACRS 

property 42

L

Land:

Not depreciable 6

Preparation costs 6

Leased property 17

Leasehold improvement property, 

defined 30

Life tenant 4

(See also Term interests)

Limit on deduction:

Automobile 57

Section 179 17

Listed property:

5% owner 54

Condition of employment 52

Defined 51

Employee deduction 52

Employer convenience 52

Improvements to 51

Leased 56

Passenger automobile 51

Qualified business use 54

Recordkeeping 61

Related person 54

Reporting on Form 4562 63

M

Maximum deduction:

Electric vehicles 59

Passenger automobiles 58

Trucks 59

Vans 59

Mobile home (See Residential rental property)

Modified ACRS (MACRS):

Addition or improvement 32

Alternative Depreciation System (ADS) 27

Conventions 32

Declining balance method 39

Depreciation methods 33

Farm property 33

Figuring, short tax year 44

General Depreciation System (GDS) 27

Percentage tables 34

Property classes 28

Recovery periods 31

Short tax year 43

Straight line method 39

N

Nonresidential real property 29

Nontaxable transfer of MACRS property 43

O

Office in the home 5, 32

Ownership, incidents of 4

P

Partial business use 16

Passenger automobile:

Defined 51

Electric vehicles 59

Limit on 57

Maximum depreciation deduction 58

Trucks 59

Vans 59

Patent 10

(See also Section 197 intangibles)

Personal property 8

Phonographic equipment (See Listed 

property)

Photographic equipment (See Listed 

property)

Placed in service:

Before 1987 8

Publication 946 (2023) 109
Date 30

Rule 7

Property:

Classes 28

Depreciable 3

Idle 7

Improvements 12

Leased 4, 17

Listed 51

Personal 8

Real 8

Retired from service 7

Tangible personal 16

Term interest 6

Publications (See Tax help)

Q

Qualified leasehold improvement property, 

defined 30

Qualified property, special depreciation 

allowance 23

R

Real property 8

Recapture:

Clean-fuel vehicle deduction or credit 36

General asset account, abusive 

transaction 48

Listed property 55

MACRS depreciation 50

Section 179 deduction 22

Special depreciation allowance 26

Recordkeeping:

Listed property 61

Section 179 22

Recovery periods:

ADS 32

GDS 31

Related persons 6, 9, 17, 54

Rent-to-own property, defined 29

Rental home (See Residential rental property)

Rented property, improvements 13

Repairs 12

Residential rental property 29

Retail motor fuels outlet 30

Revoking:

ADS election 27

General asset account election 50

Section 179 election 22

S

Sale of property 38

Section 179 deduction:

Business use required 16

Carryover 20

Dispositions 22

Electing 21

Limits:

Business (taxable) income 19

Business-use, recapture 22

Dollar 18

Partial business use 16

Married filing separate returns 18

Partnership rules 20

Property:

Eligible 16

Excepted 17

Purchase required 17

Recapture 22

Recordkeeping 22

S corporation rules 21

Settlement fees 11

Short tax year:

Figuring depreciation 44

Figuring placed-in-service date 43

Software, computer 10, 16

Sound recording 10

Special depreciation allowance:

Election not to claim 26

Qualified property 23

Recapture 26

Stock, constructive ownership of 9

Straight line method 9, 39

Created intangibles 10

T

Tangible personal property 16

Tax help 63

Term interest 6

Trade-in of property 18

Trucks 59

U

Unadjusted basis 36

Useful life 5

V

Vans 59

Video tape 10

Video-recording equipment (See Listed 

property)

W

When to use ADS 27

Worksheet:

Leased listed property 56

MACRS 36

110 Publication 946 (2023)
Tax Publications for Business Taxpayers

General Guides

Commonly Used Tax Forms

Spanish Language Publications

Your Rights as a Taxpayer

Your Federal Income Tax 

Farmer’s Tax Guide

Tax Guide for Small Business 

(Circular E), Employer’s Tax Guide

Employer’s Supplemental Tax Guide

(Circular A), Agricultural Employer’s

Tax Guide

(Circular SS), Federal Tax Guide for

Employers in the U.S. Virgin Islands,

Guam, American Samoa, and the

Commonwealth of the Northern

Mariana Islands

Household Employer’s Tax Guide

Travel, Gift, and Car Expenses

Tax Withholding and Estimated Tax

Excise Taxes 

Withholding of Tax on Nonresident

Aliens and Foreign Entities

Social Security and Other Information

for Members of the Clergy and

Religious Workers

Residential Rental Property

Depreciating Property Placed in

Service Before 1987

Business Expenses

Net Operating Losses (NOLs) for

Individuals, Estates, and Trusts

Installment Sales

Accounting Periods and Methods

Corporations

Sales and Other Dispositions of Assets

Basis of Assets

Examination of Returns, Appeal Rights,

and Claims for Refund

Retirement Plans for Small Business

Determining the Value of Donated

Property

Starting a Business and Keeping

Records

The IRS Collection Process

Information on the United States–

Canada Income Tax Treaty

How To Depreciate Property

Reporting Cash Payments of Over

$10,000 

Taxpayer Advocate Service — 

We Are Here To Help You 

Derechos del Contribuyente

English-Spanish Glossary of Words

and Phrases 

Tax on Unrelated Business Income of

Exempt Organizations

Wage and Tax Statement

Itemized Deductions

Interest and Ordinary Dividends

Capital Gains and Losses

Supplemental Income and Loss

Credit for the Elderly or the Disabled

Estimated Tax for Individuals

Self-Employment Tax

Amended U.S. Individual Income Tax Return

Capital Gains and Losses

Partner’s Share of Income,

Deductions, Credits, etc.

Employee Business Expenses

Power of Attorney and Declaration of

Representative

Child and Dependent Care Expenses

General Business Credit

Application for Automatic Extension of Time To File

U.S. Individual Income Tax Return

Moving Expenses

IRAs) and Other Tax-Favored Accounts

Installment Sale Income

Noncash Charitable Contributions

Change of Address

Expenses for Business Use of Your Home

334

225

17

1

Nondeductible IRAs

Passive Activity Loss Limitations

15

15-A

51

80

926

463

505

510

515

517

527

534

535

536

537

541

538

542

Partnerships

544

551

556

560

561

583

594

597

598

901

946

947

1544

1546

1SP

850 

(EN/SP)

594SP El Proceso de Cobro del IRS

Sch A 

Sch C

Sch D

Sch E

Sch F

Sch H Household Employment Taxes

Sch R

Sch SE

1040-ES

1040-X

Sch D

Sch K-1

1065 U.S. Return of Partnership Income

2106

2441

2848

3800

4868

3903

5329

6252

8283

8582

8606

8822

8829

Specialized Publications

W-4

Employer’s Annual Federal Unemployment

(FUTA) Tax Return

940

1040 or U.S. Individual Income Tax Return

587 Business Use of Your Home 

U.S. Tax Treaties

Practice Before the IRS and Power 

of Attorney

Employer’s Guides

Underpayment of Estimated Tax by Individuals,

Estates, and Trusts

2210

Report of Cash Payments Over $10,000 Received

in a Trade or Business

8300

4562 Depreciation and Amortization

4797 Sales of Business Property

Informe de Pagos en Efectivo en

Exceso de $10,000 

1544SP

See How To Get Tax Help for a variety of ways to get forms, including by computer, phone,

and mail. 

Form Number and Title

W-2

941 Employer’s QUARTERLY Federal Tax Return

Sch J Income Averaging for Farmers and Fishermen

Form Number and Title

15-B Employer’s Tax Guide to Fringe

See How To Get Tax Help for a variety of ways to get publications, including by 

computer, phone, and mail.

Catalog 

Number

10134

10220

11234

17001

11320

17145

Sch B 17146

11334

11338

11344

11346

12187

25513

11359

11358

11340

11360

11390

11393

11394

Catalog 

Number

11700

11744

11862

11980

12392

12490

12906

13086

13141

13329

13601

62299

62133

63704

63966

12081

8822-B Change of Address or Responsible Party — Business 57465

13232

966 Electronic Federal Tax Payment System: 

 A Guide to Getting Started

8949 Sales and Other Dispositions of Capital Assets 37768

(Circular PR), Guía Contributiva Federal

para Patronos Puertorriqueños

179

U.S. Corporation Income Tax Return

U.S. Income Tax Return for an S Corporation

1120

1120-S

Capital Gains and Losses and Built-in Gains

Shareholder’s Share of Income,

Deductions, Credits, etc.

Sch D

Sch K-1

11450

11510

11516

11520

Bankruptcy Tax Guide

925 Passive Activity and At-Risk Rules

908

8959 Additional Medicare Tax 59475

1040-SR U.S. Tax Return for Seniors 71930

Publication 946 (2023) 111