2023

Instructions for Form 4562

Depreciation and Amortization (Including Information on Listed Property)

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless 

otherwise noted.

Future Developments

For the latest information about developments related to 

Form 4562 and its instructions, such as legislation enacted 

after this form and instructions were published, go to IRS.gov/

Form4562.

What's New

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 

(SUVs) placed in service in tax years beginning in 2023 is 

$28,900.

Phase down of the special depreciation allowance for 

certain property. Certain qualified property (other than 

property with a long production period and certain aircraft) 

placed in service after December 31, 2023, and before 

January 1, 2025, is limited to a special allowance of 60% of 

the depreciable basis of the property. Property with a long 

production period and certain aircraft placed in service after 

December 31, 2023, and before January 1, 2025, is limited to 

a special depreciation allowance of 80% of the depreciable 

basis of the property. For certain plants bearing fruits and 

nuts planted and grafted after December 31, 2023, and 

before January 1, 2025, the special depreciation allowance is 

also limited to 60% of the adjusted basis of the specified 

plants. See Certain qualified property acquired after 

September 27, 2017 and Certain plants bearing fruits and 

nuts, later.

General Instructions

Purpose of Form

Use Form 4562 to:

• Claim your deduction for depreciation and amortization,

• Make the election under section 179 to expense certain 

property, and

• Provide information on the business/investment use of 

automobiles and other listed property.

Note. Do not use Form 4562 to claim the deduction for 

energy efficient commercial buildings under section 179D. 

Instead use Form 7205, Energy Efficient Commercial 

Buildings Deduction. See Form 7205 and the related 

instructions for more information.

Who Must File

Except as otherwise noted, complete and file Form 4562 if 

you are claiming any of the following.

• Depreciation for property placed in service during the 2023 

tax year.

• A section 179 expense deduction (which may include a 

carryover from a previous year).

• Depreciation on any vehicle or other listed property 

(regardless of when it was placed in service).

• A deduction for any vehicle reported on a form other than 

Schedule C (Form 1040), Profit or Loss From Business.

• Any depreciation on a corporate income tax return (other 

than Form 1120-S).

• Amortization of costs that begins during the 2023 tax year.

If you are an employee deducting job-related vehicle 

expenses using either the standard mileage rate or actual 

expenses, use Form 2106, Employee Business Expenses, for 

this purpose.

File a separate Form 4562 for each business or activity on 

your return for which Form 4562 is required. If you need more 

space, attach additional sheets. However, complete only one 

Part I in its entirety when computing your section 179 

expense deduction. See the instructions for line 12, later.

Additional Information

For more information about depreciation and amortization 

(including information on listed property), see the following.

• Pub. 463, Travel, Gift, and Car Expenses.

• Pub. 534, Depreciating Property Placed in Service Before 

1987.

• Pub. 551, Basis of Assets.

• Pub. 946, How To Depreciate Property.

Definitions

Depreciation

Depreciation is the annual deduction that allows you to 

recover the cost or other basis of your business or investment 

property over a certain number of years. Depreciation starts 

when you first use the property in your business or for the 

production of income. It ends when you either take the 

property out of service, deduct all your depreciable cost or 

basis, or no longer use the property in your business or for 

the production of income.

Generally, you can depreciate:

• Tangible property such as buildings, machinery, vehicles, 

furniture, and equipment; and

• Intangible property such as patents, copyrights, and 

computer software.

Exception. You cannot depreciate land.

Accelerated Cost Recovery System

The Accelerated Cost Recovery System (ACRS) applies to 

property first used before 1987. It is the name given for the 

tax rules that allow a taxpayer to recover through depreciation 

deductions the cost of property used in a trade or business or 

to produce income. These rules are mandatory and generally 

apply to tangible property placed in service after 1980 and 

before 1987. If you placed property in service during this 

period, you must continue to figure your depreciation under 

ACRS.

Dec 4, 2023 Cat. No. 12907Y
ACRS consists of accelerated depreciation methods and 

an alternate ACRS method that could have been elected. 

The alternate ACRS method used a recovery percentage 

based on a modified straight line method. See the 

instructions for line 16 for more information. For a complete 

discussion of ACRS, see Pub. 534.

Modified Accelerated Cost Recovery System

The Modified Accelerated Cost Recovery System (MACRS) 

is the current method of accelerated asset depreciation 

required by the tax code. Under MACRS, all assets are 

divided into classes which dictate the number of years over 

which an asset's cost will be recovered. Each MACRS class 

has a predetermined schedule which determines the 

percentage of the asset's costs which is depreciated each 

year. For more information, see Part III. MACRS 

Depreciation, later. For a complete discussion of MACRS, 

see chapter 4 of Pub. 946.

Section 179 Property

Section 179 property is property that you acquire by 

purchase for use in the active conduct of your trade or 

business, and is one of the following.

• Qualified section 179 real property. For more information, 

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

• Tangible personal property, including cellular telephones, 

similar telecommunications equipment, and air conditioning 

or heating units (for example, portable air conditioners or 

heaters). Also, tangible personal property may include 

certain property used mainly to furnish lodging or in 

connection with the furnishing of lodging (except as provided 

in section 50(b)(2)).

• Other tangible property (except buildings and their 

structural components) used as:

1. An integral part of manufacturing, production, or 

extraction, or of furnishing transportation, communications, 

electricity, gas, water, or sewage disposal services;

2. A research facility used in connection with any of the 

activities in (1) above; or

3. A facility used in connection with any of the activities in 

(1) above for the bulk storage of fungible commodities.

• Single purpose agricultural (livestock) or horticultural 

structures.

• Storage facilities (except buildings and their structural 

components) used in connection with distributing petroleum 

or any primary product of petroleum.

• Off-the-shelf computer software.

Section 179 property does not include the following.

• Property held for investment (section 212 property).

• Property used mainly outside the United States (except for 

property described in section 168(g)(4)).

• Property used by a tax-exempt organization (other than a 

section 521 farmers' cooperative) unless the property is used 

mainly in a taxable unrelated trade or business.

• Property used by a governmental unit or foreign person or 

entity (except for property used under a lease with a term of 

less than 6 months).

See the instructions for Part I and Pub. 946.

Special rules for qualified section 179 real property. You 

can elect to treat certain qualified real property placed in 

service during the tax year as section 179 property. See 

Election for certain qualified section 179 real property under 

Part I, later, for information on how to make this election. If the 

election is made, the term "section 179 property" will include 

any qualified real property which is:

• Qualified improvement property as described in section 

168(e)(6), 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.

This property is considered "qualified section 179 real 

property."

A deduction attributable to qualified section 179 real 

property which is disallowed under the trade or business 

income limitation (see Business Income Limit in chapter 2 of 

Pub. 946) for 2023 can be carried over to 2024. 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.

Amortization

Amortization is similar to the straight line method of 

depreciation in that an annual deduction is allowed to recover 

certain costs over a fixed time period. You can amortize such 

items as the costs of starting a business, goodwill, and 

certain other intangibles. See the instructions for Part VI.

Listed Property

Listed property generally includes the following.

• Passenger automobiles weighing 6,000 pounds or less. 

See Limits for passenger automobiles, later.

• Any other property used for transportation if the nature of 

the property lends itself to personal use, such as 

motorcycles, pickup trucks, SUVs, etc.

• Any property used for entertainment or recreational 

purposes (such as photographic, phonographic, 

communication, and video recording equipment).

Exceptions. Listed property does not include:

1. Photographic, phonographic, communication, or video 

equipment used exclusively in a taxpayer's trade or business 

or at the taxpayer's regular business establishment;

2. Any computer or peripheral equipment used 

exclusively at a regular business establishment and owned or 

leased by the person operating the establishment;

3. An ambulance, hearse, or vehicle used for transporting 

persons or property for compensation or hire; or

4. Any truck or van placed in service after July 6, 2003, 

that is a qualified nonpersonal use vehicle.

For purposes of the exceptions above, a portion of the 

taxpayer's home is treated as a regular business 

establishment only if that portion meets the requirements for 

deducting expenses attributable to the business use of a 

home. However, for any property listed in (1) above, the 

regular business establishment of an employee is their 

employer's regular business establishment.

Commuting

Generally, commuting is defined as travel between your 

home and a work location. However, travel that meets any of 

the following conditions is not commuting.

2 Instructions for Form 4562 (2023)
• You have at least one regular work location away from your 

home and the travel is to a temporary work location in the 

same trade or business, regardless of the distance. 

Generally, a temporary work location is one where your 

employment is expected to last 1 year or less. See Pub. 463 

for details.

• The travel is to a temporary work location outside the 

metropolitan area where you live and normally work.

• Your home is your principal place of business for purposes 

of deducting expenses for business use of your home and 

the travel is to another work location in the same trade or 

business, regardless of whether that location is regular or 

temporary and regardless of distance.

Alternative Minimum Tax (AMT)

Depreciation may be an adjustment for the AMT. However, no 

adjustment applies in several instances. See Form 6251, 

Alternative Minimum Tax—Individuals; Schedule I (Form 

1041), Alternative Minimum Tax—Estates and Trusts; and the 

related instructions.

Recordkeeping

Except for Part V (relating to listed property), the IRS does 

not require you to submit detailed information with your return 

on the depreciation of assets placed in service in previous 

tax years. However, the information needed to compute your 

depreciation deduction (basis, method, etc.) must be part of 

your permanent records.

You may use the Depreciation Worksheet, later, to 

assist you in maintaining depreciation records. 

However, the worksheet is designed only for federal 

income tax purposes. You may need to keep additional 

records for accounting and state income tax purposes.

Specific Instructions

Part I. Election To Expense Certain 

Property Under

Section 179

Note. An estate or trust cannot make this election.

You can elect to expense part or all of the cost of section 

179 property (defined earlier) that you placed in service 

during the tax year and used predominantly (more than 50%) 

in your trade or business.

However, for taxpayers other than a corporation, this 

election does not apply to any section 179 property you 

purchased and leased to others unless:

• You manufactured or produced the property; or

• The term of the lease is less than 50% of the property's 

class life and, for the first 12 months after the property is 

transferred to the lessee, the deductions related to the 

property allowed to you as trade or business expenses 

(except rents and reimbursed amounts) are more than 15% 

of the rental income from the property.

Election. You must make the election on Form 4562 filed 

with either:

• The original return you file for the tax year the property was 

placed in service (whether or not you file your return on time), 

or

TIP

• An amended return filed within the time prescribed by law 

for the applicable tax year. The 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.

Election for certain qualified section 179 real 

property. You can elect to expense certain qualified real 

property that you first placed in service as section 179 

property for tax years beginning in 2023. For more 

information, see Election above.

Revocation. The election (or any specification made in the 

election) can be revoked without obtaining IRS approval by 

filing an amended return. The amended return must be filed 

within the time prescribed by law for the applicable tax year. 

The amended return must include any resulting adjustments 

to taxable income or to the tax liability (for example, allowable 

depreciation in that tax year for the item of section 179 

property to which the revocation pertains). For more 

information and examples, see Regulations sections 

1.179-5(c)(3) and (c)(4). Once made, the revocation is 

irrevocable.

If you elect to expense section 179 property, you 

must reduce the amount on which you figure your 

depreciation or amortization deduction (including any 

special depreciation allowance) by the section 179 expense 

deduction.

Line 1

Generally, the maximum section 179 expense deduction is 

$1,160,000 for section 179 property (including qualified 

section 179 real property) placed in service during the tax 

year beginning in 2023.

You can use Worksheet 1 to assist you in determining 

the amount to enter on line 1.

Recapture rule. If the section 179 property is not used 

predominantly (more than 50%) in your trade or business at 

any time before the end of the property's recovery period, the 

benefit of the section 179 expense deduction must be 

reported as “other income” on your return.

If any qualified section 179 disaster assistance property 

ceases to be used in the applicable federally declared 

disaster area in any year after you claim the increased 

section 179 expense deduction for that property, the benefit 

of the increased section 179 expense deduction must be 

reported as “other income” on your return. Similar rules apply 

if qualified Liberty Zone property ceases to be used in the 

Liberty Zone, if qualified section 179 GO Zone property 

ceases to be used in the GO Zone, if qualified section 179 

Recovery Assistance property ceases to be used in the 

Recovery Assistance area, if qualified empowerment zone 

property ceases to be used in an empowerment zone by an 

enterprise zone business, or if qualified renewal property 

ceases to be used in a renewal community by a renewal 

community business in any year after you claim the increased 

section 179 expense deduction.

Line 2

Enter the total cost of all section 179 property you placed in 

service during the tax year (including the total cost of 

CAUTION

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Instructions for Form 4562 (2023) 3
qualified real property that you elect to treat as section 179 

property). Also, include the cost of the following.

• Any listed property from Part V.

• Any property placed in service by your spouse, even if you 

are filing a separate return. This includes qualified section 

179 real property that your spouse made the election to treat 

as section 179 property for 2023.

Line 3

The amount of section 179 property for which you can make 

the election is limited to the maximum dollar amount on 

line 1. This amount is reduced if the cost of all section 179 

property placed in service in 2023 is more than $2,890,000.

For a partnership, these limitations apply to the 

partnership and each partner. For an S corporation, these 

limitations apply to the S corporation and each shareholder. 

For a controlled group, all component members are treated 

as one taxpayer.

Line 5

If line 5 is zero, you cannot elect to expense any section 179 

property. In this case, skip lines 6 through 11, enter zero on 

line 12, and enter the carryover of any disallowed deduction 

from 2019 (which does not include amounts attributable to 

qualified section 179 real property) on line 13.

See Special rules for qualified section 179 real property, 

earlier.

If you are married filing separately, you and your spouse 

must allocate the dollar limitation for the tax year. To do so, 

multiply the total limitation that you would otherwise enter on 

line 5 by 50% (0.50), unless you both elect a different 

allocation. If you both elect a different allocation, multiply the 

total limitation by the percentage elected. The sum of the 

percentages you and your spouse elect must equal 100%.

Do not enter on line 5 more than your share of the total 

dollar limitation.

Line 6

Do not include any listed property on line 6. Enter the elected 

section 179 cost of listed property in column (i) of line 26.

Column (a)—Description of property. Enter a brief 

description of the property you elect to expense (for example, 

truck, office furniture, qualified improvement property, roof, 

etc.).

Column (b)—Cost (business use only). Enter the cost of 

the property. If you acquired the property through a trade-in, 

do not include any carryover basis of the property traded in. 

Include only the excess of the cost of the property over the 

value of the property traded in.

Column (c)—Elected cost. Enter the amount you elect to 

expense. You can depreciate the amount you do not 

expense. See the line 19 and line 20 instructions.

To report your share of a section 179 expense deduction 

from a partnership or an S corporation, enter “from 

Schedule K-1 (Form 1065)” or “from Schedule K-1 (Form 

1120-S)” across columns (a) and (b).

Line 7

Enter the amount that you elected to expense for listed 

property (defined earlier) on line 29 here. For more 

information, see Part V—Listed Property, later.

Line 10

The carryover of disallowed deduction from 2022 is the 

amount of section 179 property, if any, you elected to 

expense in previous years that was not allowed as a 

deduction because of the business income limitation. If you 

filed Form 4562 for 2022, enter the amount from line 13 of 

your 2022 Form 4562.

Line 11

The total cost you can deduct is limited to your taxable 

income from the active conduct of a trade or business during 

the year. You are considered to actively conduct a trade or 

business only if you meaningfully participate in its 

management or operations. A mere passive investor is not 

considered to actively conduct a trade or business.

Note. If you have to apply another Code section that has a 

limitation based on taxable income, see Pub. 946 for rules on 

Worksheet 1. Worksheet for Lines 1, 2, and 3 Keep for Your Records

Maximum section 179 limitation calculation.

1.* Enter total cost of section 179 property (including qualified section 179 real property) placed in service during the tax year 

beginning in 2023 .........................................................................

2. The maximum section 179 deduction limitation for 2023 .............................................. $1,160,000

3. Enter the smaller of line 1 or line 2 here ..........................................................

4. Enter the amount from line 3 here and on Form 4562, line 1 ............................................

Maximum threshold cost of section 179 property before reduction in limitation calculation.

5. Enter the amount from line 1 here and on Form 4562, line 2 ............................................

6. Base maximum threshold cost of section 179 property before reduction in limitation for 2023. Enter this amount on Form 

4562, line 3 .............................................................................

$2,890,000

Maximum elected cost for Form 4562, lines 6 and 7, column (c).

7. Enter the smaller of line 1 or line 4. The total amount you enter on Form 4562, lines 6 and 7, column (c), cannot 

exceed this amount .......................................................................

* For line 1 of this worksheet, include the total amount of eligible section 179 property (including qualified section 179 real property), not just the amount for which you are 

making the election. See the instructions for line 2.

4 Instructions for Form 4562 (2023)
how to apply the business income limitation for the section 

179 expense deduction.

Individuals. Enter the smaller of line 5 or the total taxable 

income from any trade or business you actively conducted, 

computed without regard to any section 179 expense 

deduction, the deduction for one-half of self-employment 

taxes under section 164(f), or any net operating loss 

deduction. Also, include all wages, salaries, tips, and other 

compensation you earned as an employee (from Form 1040, 

line 1). Do not reduce this amount by unreimbursed 

employee business expenses. If you are married filing a joint 

return, combine the total taxable incomes for you and your 

spouse.

Partnerships. Enter the smaller of line 5 or the partnership's 

total items of income and expense, described in section 

702(a), from any trade or business the partnership actively 

conducted (other than credits, tax-exempt income, the 

section 179 expense deduction, and guaranteed payments 

under section 707(c)).

S corporations. Enter the smaller of line 5 or the 

corporation's total items of income and expense described in 

section 1366(a) from any trade or business the corporation 

actively conducted (other than credits, tax-exempt income, 

the section 179 expense deduction, and the deduction for 

compensation paid to the corporation's 

shareholder-employees).

Corporations other than S corporations. Enter the 

smaller of line 5 or the corporation's taxable income before 

the section 179 expense deduction, net operating loss 

deduction, and special deductions (excluding items not 

derived from a trade or business actively conducted by the 

corporation).

Line 12

The limitations on lines 5 and 11 apply to the taxpayer, and 

not to each separate business or activity. Therefore, if you 

have more than one business or activity, you may allocate 

your allowable section 179 expense deduction among them.

To do so, enter “Summary” at the top of Part I of the 

separate Form 4562 you are completing for the total amounts 

from all businesses or activities. Do not complete the rest of 

that form. On line 12 of the Form 4562 you prepare for each 

separate business or activity, enter the amount allocated to 

the business or activity from the “Summary.” No other entry is 

required in Part I of the separate Form 4562 prepared for 

each business or activity.

Part II. Special Depreciation 

Allowance and Other Depreciation

Line 14

For qualified property (defined below) placed in service 

during the tax year, you may be able to take an additional 

special depreciation allowance. The special depreciation 

allowance applies only for the first year the property is placed 

in service. The allowance is an additional deduction you can 

take after any section 179 expense deduction and before you 

figure regular depreciation under MACRS.

Qualified property. You can take the special depreciation 

allowance for certain qualified property acquired after 

September 27, 2017, qualified reuse and recycling property, 

and certain plants bearing fruits and nuts.

Certain qualified property acquired after September 

27, 2017. Certain qualified property (defined below) 

acquired after September 27, 2017, and placed in service 

after December 31, 2022, and before January 1, 2024 (other 

than property with a long production period and certain 

aircraft), is limited to a special depreciation allowance of 80% 

of the depreciable basis of the property. Property with a long 

production period and certain aircraft acquired after 

September 27, 2017, and placed in service before January 1, 

2024, is eligible for a special depreciation allowance of 100% 

of the depreciable basis of the property.

The special depreciation allowance for certain qualified 

property (other than certain long production period property 

and certain aircraft) placed in service after December 31, 

2023, and before January 1, 2025, is limited to 60% of the 

depreciable basis of the property. Property with a long 

production period and certain aircraft placed in service after 

December 31, 2023, and before January 1, 2025, is limited to 

a special depreciation allowance of 80% of the depreciable 

basis of the property.

Qualified property is:

• Tangible property depreciated under MACRS with a 

recovery period of 20 years or less;

• Computer software defined in and depreciated under 

section 167(f)(1);

• Water utility property (see 25-year property, later); and

• Qualified film, television, and live theatrical productions, as 

defined in sections 181(d) and (e).

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.

See Pub. 946 for more information. Also, see section 

168(k) and Regulations sections 1.168(k)-2 and 1.1502-68.

Qualified reuse and recycling property. Certain 

qualified reuse and recycling property (defined below) placed 

in service after August 31, 2008, is eligible for a 50% special 

depreciation allowance.

Qualified reuse and recycling property includes any 

machinery and 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. This includes software necessary to operate such 

equipment. See section 168(m)(3) for more information.

Qualified reuse and recycling property must also meet all 

of the following tests.

• The property must be depreciated under MACRS.

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

• You must have acquired the property by purchase after 

August 31, 2008. If a binding contract to acquire the property 

existed before September 1, 2008, the property does not 

qualify.

• The property must be placed in service after August 31, 

2008.

• The original use of the property must begin with you after 

August 31, 2008.

• For self-constructed property, special rules apply. See 

section 168(m)(2)(C).

Qualified reuse and recycling property does not include 

rolling stock or other equipment used to transport reuse and 

recyclable materials or any property to which section 168(g) 

or (k) applies.

Instructions for Form 4562 (2023) 5
Certain plants bearing fruits and nuts. You can elect to 

claim an 80% special depreciation allowance for the adjusted 

basis of certain specified plants (defined later) bearing fruits 

and nuts planted or grafted after December 31, 2022, and 

before January 1, 2024. For certain specified plants bearing 

fruits and nuts planted or grafted after December 31, 2023, 

and before January 1, 2025, the special depreciation 

allowance is limited to 60% of the adjusted basis of the 

specified plants.

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 preproductive 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) indicating you are electing 

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

plant(s) for which you are making the election. Once made, 

the election cannot be revoked without IRS consent.

Exceptions. Qualified property does not include:

• Listed property used 50% or less in a qualified business 

use (as defined in the instructions for lines 26 and 27);

• Any property required to be depreciated under the 

Alternative Depreciation System (ADS) (that is, not property 

for which you elected to use ADS);

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

applicable, and disposed of in the same tax year;

• Property converted from business or income-producing 

use to personal use in the same tax year it is acquired;

• Property described in section 168(k)(9)(A) or 168(K)(9)(B); 

or

• Property for which you elected not to claim any special 

depreciation allowance.

In addition, qualified second generation biofuel plant 

property does not include the following.

• Any tax-exempt bond financed property under section 103.

• Any property for which a deduction was taken under 

section 179C for certain qualified refinery property.

• Other bonus depreciation property to which section 168(k) 

applies.

See sections 168(k) and 168(m) for additional information. 

Also, see Pub. 946.

How to figure the allowance. Figure the special 

depreciation allowance by multiplying the depreciable basis 

of the property by the applicable percentage.

To figure the depreciable basis, subtract from the 

business/investment portion of the cost or other basis of the 

property any credits and deductions allocable to the property. 

The following are examples of some credits and deductions 

that reduce the depreciable basis.

• Section 179 expense deduction.

• Deduction for removal of barriers to the disabled and the 

elderly.

• Disabled access credit.

• Enhanced oil recovery credit.

• Credit for employer-provided childcare facilities and 

services.

• Basis adjustment to investment credit property under 

section 50(c).

• Section 181 expense deduction.

For additional credits and deductions that affect the 

depreciable basis, see section 1016. Also, see Pub. 946.

Note. If you acquired qualified property through 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.

Generally, a like-kind exchange after December 31, 2017, 

is an exchange of real property.

If you acquired qualified property through 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.

If you take the special depreciation allowance, you 

must reduce the amount on which you figure your 

regular depreciation or amortization deduction by the 

amount deducted. Also, you will not have any AMT 

adjustment for depreciation for the qualified property.

Election out. You can elect, for any class of property, to not 

deduct any special depreciation allowance for all such 

property in such class placed in service during the tax year.

To make an election, attach a statement to your timely filed 

return (including extensions) indicating the class of property 

for which you are making the election and that, for such class, 

you are not to claim any special depreciation allowance.

The election must be made separately by each person 

owning qualified property (for example, by the partnership, by 

the S corporation, or for each member of a consolidated 

group by the common parent of the group).

If you timely filed your return without making an election, 

you can still make the election by filing an amended return 

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

extensions). Enter “Filed pursuant to section 301.9100-2” on 

the amended return.

Once made, the election cannot be revoked without IRS 

consent.

Note. If you elect to not have any special depreciation 

allowance apply, the property placed in service during the tax 

year will not be subject to an AMT adjustment for 

depreciation.

Recapture. 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 depreciation 

previously allowed or allowable for the property, including the 

special depreciation allowance. For more information, see 

MACRS recapture, later. If qualified GO Zone property 

(including specified GO Zone property) ceases to be 

qualified GO Zone property, if qualified Recovery Assistance 

property ceases to be qualified Recovery Assistance 

property, if qualified cellulosic biomass ethanol plant property 

ceases to be qualified cellulosic biomass ethanol plant 

property, if qualified second generation biofuel plant property 

ceases to be qualified second generation biofuel plant 

property, or if qualified disaster assistance property ceases to 

CAUTION

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6 Instructions for Form 4562 (2023)
be qualified disaster assistance property in any year after the 

year you claim the special depreciation allowance, the excess 

benefit you received from claiming the special depreciation 

allowance must be recaptured as ordinary income. For 

information on depreciation recapture, see Pub. 946. Also, 

see Notice 2008-25, 2008-9 I.R.B. 484, available at 

IRS.gov/irb/2008-09_IRB/ar10.html, for additional guidance 

on recapture of qualified GO Zone property.

Line 15

Report on this line depreciation for property that you elect to 

depreciate under the unit-of-production method or any other 

method not based on a term of years (other than the 

retirement-replacement-betterment method).

Attach a separate sheet showing:

• A description of the property and the depreciation method 

you elect that excludes the property from MACRS or ACRS; 

and

• The depreciable basis (cost or other basis reduced, if 

applicable, by salvage value, any section 179 expense 

deduction, deduction for removal of barriers to the disabled 

and the elderly, disabled access credit, enhanced oil 

recovery credit, credit for employer-provided childcare 

facilities and services, any special depreciation allowance, 

and any other applicable deduction or credit).

For additional credits and deductions that may affect the 

depreciable basis, see section 1016. Also, see section 50(c) 

to determine the basis adjustment for investment credit 

property.

Line 16

Enter the total depreciation you are claiming for the following 

types of property (except listed property and property subject 

to a section 168(f)(1) election).

• ACRS property (pre-1987 rules). See Pub. 534.

• Property placed in service before 1981.

• Certain public utility property which does not meet certain 

normalization requirements.

• Certain property acquired from related persons.

• Property acquired in certain nonrecognition transactions.

• Certain sound recordings, movies, and videotapes.

• Property depreciated under the income forecast method. 

The use of the income forecast method is limited to motion 

picture films, videotapes, sound recordings, copyrights, 

books, and patents.

If you take the special depreciation allowance for a 

qualified film, television, or live theatrical production, 

you must reduce the amount on which you figure your 

regular depreciation deduction by the amount deducted.

If you use the income forecast method for any property 

placed in service after September 13, 1995, you may owe 

interest or be entitled to a refund for the 3rd and 10th tax 

years beginning after the tax year the property was placed in 

service. For details, see Form 8866, Interest Computation 

Under the Look-Back Method for Property Depreciated 

Under the Income Forecast Method.

For property placed in service in the current tax year, you 

can either include certain participations and residuals in the 

adjusted basis of the property or deduct these amounts when 

paid. See section 167(g)(7). You cannot use this method to 

depreciate any amortizable section 197 intangible. For more 

details, see the instructions for section 197 intangibles, later.

• Intangible property, other than section 197 intangibles, 

including the following.

CAUTION

!

1. Computer software. Use the straight line method over 

36 months. A longer period may apply to 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). See section 167(f)

(1)(C).

If you elect the section 179 expense deduction or 

take the special depreciation allowance for qualified 

computer software, you must reduce the amount on 

which you figure your regular depreciation deduction by the 

amount deducted.

2. Any right to receive tangible property or services under 

a contract or granted by a governmental unit (not acquired as 

part of a business).

3. Any interest in a patent or copyright not acquired as 

part of a business.

4. Residential mortgage servicing rights. Use the straight 

line method over 108 months.

5. Other intangible assets with a limited useful life that 

cannot be estimated with reasonable accuracy. Generally, 

use the straight line method over 15 years. See Regulations 

section 1.167(a)-3(b) for details and exceptions.

Prior years' depreciation, plus current year's 

depreciation, can never exceed the depreciable basis 

of the property.

Part III. MACRS Depreciation

The term “Modified Accelerated Cost Recovery System” 

(MACRS) includes the General Depreciation System (GDS) 

and the Alternative Depreciation System (ADS). Generally, 

MACRS is used to depreciate any tangible property placed in 

service after 1986. However, MACRS does not apply to films, 

videotapes, and sound recordings. For more details and 

exceptions, see Pub. 946.

Section A

Line 17

For tangible property placed in service in tax years beginning 

before 2023 and depreciated under MACRS (“MACRS 

asset”), enter the deductions for the current year. To figure 

the deductions, see the instructions for line 19, column (g).

Note. If you dispose of a portion of a MACRS asset and are 

required to (or elect to) take the basis of the asset into 

account, you must reduce the basis and depreciation reserve 

of the MACRS asset by the basis and depreciation reserve 

attributable to the disposed portion as of the first day of the 

tax year before you compute the depreciation deduction for 

the current year. To figure the depreciation deduction for the 

remaining MACRS asset and the disposed portion, see the 

instructions for line 19, column (g). For more information, see 

Regulations section 1.168(i)-8.

Line 18

To simplify the computation of MACRS depreciation, you can 

elect to group assets into one or more general asset 

accounts. The assets in each general asset account are 

depreciated as a single asset.

Each general asset account must include only assets that 

were placed in service during the same tax year and that 

CAUTION

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CAUTION

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Instructions for Form 4562 (2023) 7
have the same depreciation method, recovery period, and 

convention. However, an asset cannot be included in a 

general asset account if the asset is used both for personal 

purposes and business/investment purposes.

When an asset in an account is disposed of, the amount 

realized must generally be recognized as ordinary income. 

The unadjusted depreciable basis and depreciation reserve 

of the general asset account are not affected as a result of a 

disposition.

Special rules apply to passenger automobiles, assets 

generating foreign source income, assets converted to 

personal use, certain asset dispositions, and like-kind 

exchanges or involuntary conversions of property in a general 

asset account. For more details, see Regulations section 

1.168(i)-1 (as in effect for tax years beginning on or after 

January 1, 2014).

To make the election, check the box on line 18. You must 

make the election on your return filed no later than the due 

date (including extensions) for the tax year in which the 

assets included in the general asset account were placed in 

service. Once made, the election is irrevocable and applies 

to the tax year for which the election is made and all later tax 

years.

For more information on depreciating property in a general 

asset account, see Pub. 946.

Section B

Property acquired in a like-kind exchange or involuntary 

conversion. Generally, you must depreciate the carryover 

basis of property you acquire in a like-kind exchange or 

involuntary conversion during the current tax year over the 

remaining recovery period of the property exchanged or 

involuntarily converted. Use the same depreciation method 

and convention that was used for the exchanged or 

involuntarily converted property. Treat any excess basis as 

newly placed in service property. Figure depreciation 

separately for the carryover basis and the excess basis, if 

any.

These rules apply only to acquired property with the same 

or a shorter recovery period or the same or a more 

accelerated depreciation method than the property 

exchanged or involuntarily converted. For additional rules, 

see Regulations section 1.168(i)-6(c) and Pub. 946.

Election out. Instead of using the above rules, you can 

elect, for depreciation purposes, to treat the adjusted basis of 

the exchanged property as if it was disposed of at the time of 

the exchange or involuntary conversion. Generally, treat the 

carryover basis and excess basis, if any, for the acquired 

property as if placed in service on the date you acquired it. 

The depreciable basis of the new property is the adjusted 

basis of the exchanged or involuntarily converted property 

plus any additional amount paid for it. See Regulations 

section 1.168(i)-6(i).

To make the election, figure the depreciation deduction for 

the new property in Part III. For listed property, use Part V. 

Attach a statement indicating “Election made under section 

1.168(i)-6(i)” for each property involved in the exchange or 

involuntary conversion. The election must be made 

separately by each person acquiring replacement property 

(for example, by the partnership, by the S corporation, or by 

the common parent of a consolidated group). The election 

must be made on your timely filed return (including 

extensions). Once made, the election cannot be revoked 

without IRS consent.

Generally, a like-kind exchange after December 31, 

2017, is an exchange of real property.

Lines 19a Through 19i

Use lines 19a through 19i only for assets placed in service 

during the tax year beginning in 2023 and depreciated under 

GDS, except for automobiles and other listed property (which 

are reported in Part V).

Column (a)—Classification of property. Sort the property 

you acquired and placed in service during the tax year 

beginning in 2023 according to its classification (3-year 

property, 5-year property, etc.) as shown in column (a) of 

lines 19a through 19i. The classifications for some property 

are shown below. For property not shown, see Determining 

the classification, later.

3-year property includes the following.

• A race horse that is more than 2 years old at the time.

• Any horse (other than a race horse) that is more than 12 

years old at the time it is placed in service.

• Any qualified rent-to-own property (as defined in section 

168(i)(14)).

5-year property includes the following.

• Automobiles.

• Light general purpose trucks.

• Typewriters, calculators, copiers, and duplicating 

equipment.

• Any semi-conductor manufacturing equipment.

• Any qualified technological equipment.

• Any section 1245 property used in connection with 

research and experimentation.

• Certain energy property specified in section 168(e)(3)(B)

(vi).

• Appliances, carpets, furniture, etc., used in a rental real 

estate activity.

• Any new machinery or 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.

7-year property includes the following.

• Office furniture and equipment.

• Railroad track.

• Any motorsports entertainment complex (as defined in 

section 168(i)(15)).

• Any natural gas gathering line (as defined in section 168(i)

(17)) placed in service after April 11, 2005, the original use of 

which begins with you after April 11, 2005, and is not under 

self-construction or subject to a binding contract in existence 

before April 12, 2005. Also, no AMT adjustment is required.

• Any 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).

• Any property that does not have a class life and is not 

otherwise classified.

10-year property includes the following.

• Vessels, barges, tugs, and similar water transportation 

equipment.

• Any single purpose agricultural or horticultural structure 

(see section 168(i)(13)).

• Any tree or vine bearing fruits or nuts.

• Any qualified smart electric meter property.

• Any qualified smart electric grid system property.

CAUTION

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8 Instructions for Form 4562 (2023)
15-year property includes the following.

• Any municipal wastewater treatment plant.

• Any telephone distribution plant and comparable 

equipment used for 2-way exchange of voice and data 

communications.

• Any section 1250 property that is a retail motor fuels outlet 

(whether or not food or other convenience items are sold 

there).

• Initial clearing and grading land improvements for gas 

utility property.

• Certain electric transmission property specified in section 

168(e)(3)(E)(v) placed in service after April 11, 2005, the 

original use of which begins with you after April 11, 2005, and 

is not under self-construction or subject to a binding contract 

in existence before April 12, 2005.

• Qualified improvement property, as defined in section 

168(e)(6), placed in service by you after December 31, 2017.

20-year property includes the following.

• Farm buildings (other than single purpose agricultural or 

horticultural structures).

• Municipal sewers not classified as 25-year property.

• Initial clearing and grading land improvements for electric 

utility transmission and distribution plants.

25-year property is water utility property, which is:

• Property that is an integral part of the gathering, treatment, 

or commercial distribution of water that, without regard to this 

classification, would be 20-year property; and

• Municipal sewers.

This classification does not apply to property placed in 

service under a binding contract in effect at all times since 

June 9, 1996.

Residential rental property is a building in which 80% or 

more of the total rent is from dwelling units.

Nonresidential real property is any real property that is 

neither residential rental property nor property with a class 

life of less than 27.5 years.

50-year property includes any improvements necessary 

to construct or improve a roadbed or right-of-way for railroad 

track that qualifies as a railroad grading or tunnel bore under 

section 168(e)(4).

There is no separate line to report 50-year property. 

Therefore, attach a statement showing the same information 

as required in columns (a) through (g). Include the deduction 

in the line 22 “Total” and enter “See attachment” in the bottom 

margin of the form.

Determining the classification. If your depreciable 

property is not listed above, determine the classification as 

follows.

1. Find the property's class life. See the Table of Class 

Lives and Recovery Periods in Pub. 946.

2. Use the following table to find the classification in 

column (b) that corresponds to the class life of the property in 

column (a).

(a)

Class life (in years)

(See Pub. 946.)

(b)

Classification

4 or less .................... 3-year property

More than 4 but less than 10 ........ 5-year property

10 or more but less than 16 ........ 7-year property

16 or more but less than 20 ........ 10-year property

20 or more but less than 25 ........ 15-year property

25 or more ................... 20-year property

Column (b)—Month and year placed in service. For lines 

19h and 19i, enter the month and year you placed the 

property in service. 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.

Column (c)—Basis for depreciation (business/investment use only). To find the basis for depreciation, multiply 

the cost or other basis of the property by the percentage of 

business/investment use. From that result, subtract any 

credits and deductions allocable to the property. The 

following are examples of some credits and deductions that 

reduce the basis for depreciation.

• Section 179 expense deduction.

• Deduction under section 179D for certain energy efficient 

commercial building property.

• Deduction for removal of barriers to the disabled and the 

elderly.

• Disabled access credit.

• Enhanced oil recovery credit.

• Credit for alternative fuel vehicle refueling property.

• Credit for employer-provided childcare facilities and 

services.

• Any special depreciation allowance included on line 14.

• Any basis adjustment for investment credit property. See 

section 50(c).

• Any basis adjustment for advanced manufacturing 

investment credit property. See section 48D(d)(5).

For additional credits and deductions that affect the 

depreciable basis, see section 1016 and Pub. 946.

Column (d)—Recovery period. Determine the recovery 

period from the following table. See Pub. 946 for more 

information on the recovery period for MACRS property.

Recovery Period for Most Property

Classification Recovery period

3-year property .................... 3 yrs.

5-year property .................... 5 yrs.

7-year property .................... 7 yrs.

10-year property ................... 10 yrs.

15-year property ................... 15 yrs.

20-year property ................... 20 yrs.

25-year property ................... 25 yrs.

Residential rental property ............. 27.5 yrs.

Nonresidential real property ............ 39 yrs.

Railroad gradings and tunnel bores ....... 50 yrs.

Column (e)—Convention. The applicable convention 

determines the portion of the tax year for which depreciation 

is allowable during a year property is either placed in service 

or disposed of. There are three types of conventions. To 

select the correct convention, you must know the type of 

property and when you placed the property in service.

Half-year convention. This convention applies to all 

property reported on lines 19a through 19g, unless the 

mid-quarter convention applies. It does not apply to 

residential rental property, nonresidential real property, and 

railroad gradings and tunnel bores. It treats all property 

placed in service (or disposed of) during any tax year as 

placed in service (or disposed of) on the midpoint of that tax 

year. Enter “HY” in column (e).

Mid-quarter convention. If the total depreciable bases 

(before any special depreciation allowance) of MACRS 

property placed in service during the last 3 months of your 

Instructions for Form 4562 (2023) 9
tax year exceed 40% of the total depreciable bases of 

MACRS property placed in service during the entire tax year, 

the mid-quarter, instead of the half-year, convention generally 

applies.

In determining whether the mid-quarter convention 

applies, do not take into account the following.

• Property that is being depreciated under a method other 

than MACRS.

• Any residential rental property, nonresidential real property, 

or railroad gradings and tunnel bores.

• Property that is placed in service and disposed of within 

the same tax year.

The mid-quarter convention treats all property placed in 

service (or disposed of) during any quarter as placed in 

service (or disposed of) on the midpoint of that quarter. 

However, no depreciation is allowed under this convention for 

property that is placed in service and disposed of within the 

same tax year. Enter “MQ” in column (e).

Mid-month convention. This convention applies only to 

residential rental property (line 19h), nonresidential real 

property (line 19i), and railroad gradings and tunnel bores. It 

treats all property placed in service (or disposed of) during 

any month as placed in service (or disposed of) on the 

midpoint of that month. Enter “MM” in column (e).

Column (f)—Method. Applicable depreciation methods are 

prescribed for each classification of property as follows. 

However, you can make an irrevocable election to use the 

straight line method for all property within a classification that 

is placed in service during the tax year. Enter “200 DB” for 

200% declining balance, “150 DB” for 150% declining 

balance, or “S/L” for straight line.

• 3-, 5-, 7-, and 10-year property. Generally, the applicable 

method is the 200% declining balance method, switching to 

the straight line method in the first tax year that the straight 

line rate exceeds the declining balance rate.

Note. The straight line method is the only applicable method 

for trees and vines bearing fruits or nuts. The 150% declining 

balance method is the only applicable method for any 

qualified smart electric meter or any qualified smart electric 

grid system property placed in service after October 3, 2008.

For 3-, 5-, 7-, or 10-year property eligible for the 200% 

declining balance method, you can make an irrevocable 

election to use the 150% declining balance method, 

switching to the straight line method in the first tax year that 

the straight line rate exceeds the declining balance rate. The 

election applies to all property within the classification for 

which it is made and that was placed in service during the tax 

year. You will not have an AMT adjustment for any property 

included under this election.

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.

• 15- and 20-year property and property used in a 

farming business. The applicable method is the 150% 

declining balance method, switching to the straight line 

method in the first tax year that the straight line rate exceeds 

the declining balance rate. For 3-, 5-, 7-, and 10-year 

property used in a farming business and placed in service 

after 2017, see 3-, 5-, 7-, or 10-year property above.

• Water utility property, residential rental property, 

nonresidential real property, or any railroad grading or 

tunnel bore. The only applicable method is the straight line 

method.

Column (g)—Depreciation deduction. To figure the 

depreciation deduction, you may use optional Tables A 

through E, which begin later. Multiply column (c) by the 

applicable rate from the appropriate table. See Pub. 946 for 

complete tables. If you disposed of the property during the 

current tax year, multiply the result by the applicable decimal 

amount from the tables in Step 3, later. Or, you may compute 

the deduction yourself by completing the following steps.

Step 1. Determine the depreciation rate as follows.

• If you are using the 200% or 150% declining balance 

method in column (f), divide the declining balance rate (use 

2.00 for 200 DB or 1.50 for 150 DB) by the number of years in 

the recovery period in column (d). For example, for property 

depreciated using the 200 DB method over a recovery period 

of 5 years, divide 2.00 by 5 for a rate of 40%. You must switch 

to the straight line rate in the first year that the straight line 

rate exceeds the declining balance rate.

• If you are using the straight line method, divide 1.00 by the 

remaining number of years in the recovery period as of the 

beginning of the tax year (but not less than 1). For example, if 

there are 61/2 years remaining in the recovery period as of the 

beginning of the year, divide 1.00 by 6.5 for a rate of 15.38%.

Step 2. Multiply the percentage rate determined in Step 1 

by the property's unrecovered basis (basis for depreciation 

(as defined in column (c)) reduced by all prior years' 

depreciation.

Step 3. For property placed in service or disposed of 

during the current tax year, multiply the result from Step 2 by 

the applicable decimal amount from the tables below (based 

on the convention shown in column (e)).

Half-year (HY) convention..................... 0.5

Mid-quarter (MQ) convention

Placed in service 

(or disposed of) during the:

Placed 

in service

Disposed

of

1st quarter .......... 0.875 0.125

2nd quarter ......... 0.625 0.375

3rd quarter .......... 0.375 0.625

4th quarter .......... 0.125 0.875

Mid-month (MM) convention

Placed in service 

(or disposed of) during the:

Placed 

in service

Disposed

of

1st month ........... 0.9583 0.0417

2nd month ........... 0.8750 0.1250

3rd month ........... 0.7917 0.2083

4th month ........... 0.7083 0.2917

5th month ........... 0.6250 0.3750

6th month ........... 0.5417 0.4583

7th month ........... 0.4583 0.5417

8th month ........... 0.3750 0.6250

9th month ........... 0.2917 0.7083

10th month ........... 0.2083 0.7917

11th month ........... 0.1250 0.8750

12th month ........... 0.0417 0.9583

Short tax years. See Pub. 946 for rules on how to 

compute the depreciation deduction for property placed in 

service in a short tax year.

10 Instructions for Form 4562 (2023)
Section C

Lines 20a Through 20d

Complete lines 20a through 20d for assets, other than 

automobiles and other listed property, placed in service only 

during the tax year beginning in 2023 and depreciated under 

ADS. Report on line 17 MACRS depreciation on assets 

placed in service in prior years.

Under ADS, use the applicable depreciation method, the 

applicable recovery period, and the applicable convention to 

compute depreciation.

The following types of property must be depreciated under 

ADS.

• Tangible property used predominantly outside the United 

States.

• Tax-exempt use property.

• Tax-exempt bond financed property.

• Imported property covered by an executive order of the 

President of the United States.

• Property used predominantly in a farming business and 

placed in service during any tax year in which you made an 

election under section 263A(d)(3) to not have the uniform 

capitalization rules of section 263A apply.

• Any nonresidential real property, residential rental property, 

or qualified improvement property held by an electing real 

property trade or business (as defined in section 163(j)(7)

(B)).

• Any property that has a recovery period of 10 years or 

more under section 168(c) that is held by an electing farming 

business (as defined in section 163(j)(7)(C)).

Instead of depreciating property under GDS (line 19), you 

can make an irrevocable election for any classification of 

property for any tax year to use ADS. For residential rental 

and nonresidential real property, you can make this election 

separately for each property. You make this election by 

completing line 20 of Form 4562.

Column (a)—Classification of property. Use the following 

rules to determine the classification of the property under 

ADS.

Under ADS, the depreciation deduction for most property 

is based on the property's class life. See section 168(g)(3) for 

special rules for determining the class life for certain property. 

See Pub. 946 for information on recovery periods for ADS 

and the Table of Class Lives and Recovery Periods.

Use line 20a for all property depreciated under ADS, 

except property that does not have a class life, residential 

rental and nonresidential real property, water utility property, 

and railroad gradings and tunnel bores. Use line 20b for 

property that does not have a class life. Use line 20c for 

residential rental property. Use line 20d for nonresidential real 

property.

Residential rental property. The ADS recovery period 

for residential rental property placed in service after 2017 is 

30 years. 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. Report depreciation for these assets 

on line 20c. For more information, see Pub. 946.

Water utility property and railroad gradings and 

tunnel bores. These assets are 50-year property under 

ADS. There is no separate line to report 50-year property. 

Therefore, attach a statement showing the same information 

required in columns (a) through (g). Include the deduction in 

the line 22 “Total” and enter “See attachment” in the bottom 

margin of the form.

Column (b)—Month and year placed in service. For 

residential rental property and 40-year property, enter the 

month and year placed in service or converted to use in a 

trade or business or for the production of income.

Column (c)—Basis for depreciation (business/investment use only). See the instructions for line 19, column (c).

Column (d)—Recovery period. On line 20a, enter the 

property's class life.

Column (e)—Convention. Under ADS, the applicable 

conventions are the same as those used under GDS. See the 

instructions for line 19, column (e).

Column (g)—Depreciation deduction. Figure the 

depreciation deduction in the same manner as under GDS, 

except use the straight line method over the ADS recovery 

period and use the applicable convention.

MACRS recapture. If you later dispose of property 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 any of the following amounts taken during the 2023 

tax year.

• Any section 179 expense deduction claimed on the 

property.

• Any special depreciation allowance available for the 

property (unless you elected not to claim it).

• Any deduction under section 179B for capital costs 

incurred in complying with Environmental Protection Agency 

sulfur regulations.

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 (discussed earlier). For more information on 

depreciation recapture, see Pub. 946.

Part IV. Summary

Line 22

A partnership or S corporation does not include any section 

179 expense deduction (line 12) on this line. Instead, any 

section 179 expense deduction is passed through separately 

to the partners and shareholders on the appropriate line of 

their Schedules K-1.

Line 23

If you are subject to the uniform capitalization rules of section 

263A, enter the increase in basis from costs you must 

capitalize. For a detailed discussion of who is subject to 

these rules, which costs must be capitalized, and allocation 

of costs among activities, see Regulations section 1.263A-1.

Part V. Listed Property

If you claim the standard mileage rate, actual vehicle 

expenses (including depreciation), or depreciation on other 

listed property, you must provide the information requested in 

Part V, regardless of the tax year the property was placed in 

service. However, if you file Form 2106, report this 

information on that form and not in Part V. Also, if you file 

Schedule C (Form 1040) and are claiming the standard 

Instructions for Form 4562 (2023) 11
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.

Section A

The section 179 expense deduction should be 

computed before calculating any special depreciation 

allowance and/or regular depreciation deduction. 

See the instructions for line 26, column (i).

Listed property used 50% or less in a qualified business 

use (as defined in the instructions for lines 26 and 27 below) 

does not qualify for the section 179 expense deduction or 

special depreciation allowance.

Line 25

If you placed in service certain qualified listed property during 

the tax year, you may be able to deduct the special 

depreciation allowance. This property includes certain 

qualified property acquired after September 27, 2017, and 

placed in service before January 1, 2027 (before January 1, 

2028, for certain aircraft). See the instructions for line 14 for 

the definition of qualified property and how to figure the 

deduction. This special depreciation allowance is included in 

the overall limit on depreciation and section 179 expense 

deduction for passenger automobiles. See the tables for 

limitations on passenger vehicles and trucks and vans, later. 

Enter on line 25 your total special depreciation allowance for 

all qualified listed property.

Lines 26 and 27

Use line 26 to figure depreciation for property used more than 

50% in a qualified business use. Use line 27 to figure the 

depreciation for property used 50% or less in a qualified 

business use. Also, see Limits for passenger automobiles, 

later.

If you acquired the property through a trade-in, 

special rules apply for determining the basis, 

recovery period, depreciation method, and 

convention. For more details, see Property acquired in a 

like-kind exchange or involuntary conversion, earlier. Also, 

see Regulations section 1.168(i)-6(d)(3).

Qualified business use. To determine whether to use 

line 26 or line 27 to report your listed property, you must first 

determine the percentage of qualified business use for each 

property. Generally, a qualified business use is any use in 

your trade or business. However, it does not include any of 

the following.

• Investment use.

• Leasing the property to a 5% owner or related person.

• The use of the property as compensation for services 

performed by a 5% owner or related person.

• The use of the property as compensation for services 

performed by any person (who is not a 5% owner or related 

person), unless an amount is included in that person's 

income for the use of the property and, if required, income 

tax was withheld on that amount.

Excluding these uses above from the numerator, 

determine your percentage of qualified business use similar 

to the method used to figure the business/investment use 

percentage in column (c). Your percentage of qualified 

business use may be smaller than the business/investment 

use percentage.

CAUTION

!

CAUTION

!

For more information, including the definition of a 5% 

owner and related person and exceptions, see Pub. 946.

Listed property recapture. If you used listed property more 

than 50% in a qualified business use in the year you placed 

the property in service, and used it 50% or less in a later year, 

you may have to include as income part of the depreciation, 

including the special depreciation allowance, deducted in 

prior years. Use Form 4797, Sales of Business Property, to 

figure the recapture amount.

Column (a)—Type of property. List on a 

property-by-property basis all your listed property in the 

following order.

1. Automobiles and other vehicles.

2. Other listed property (computers and peripheral 

equipment placed in service before 2018, etc.).

In column (a), list the makes and models of automobiles, 

and give a general description of other listed property.

If you have more than five vehicles used 100% for 

business/investment purposes, you may group them by tax 

year. Otherwise, list each vehicle separately.

Column (b)—Date placed in service. Enter the date the 

property was placed in service. If property held for personal 

use is converted to business/investment use, treat the 

property as placed in service on the date of conversion.

Column (c)—Business/investment use percentage. 

Enter the percentage of business/investment use. For 

automobiles and other vehicles, determine this percentage 

by dividing the number of miles the vehicle is driven for trade 

or business purposes or for the production of income during 

the year (not to include any commuting mileage) by the total 

number of miles the vehicle is driven for all purposes. Treat 

vehicles used by employees as being used 100% for 

business/investment purposes if the value of personal use is 

included in the employees' gross income, or the employees 

reimburse the employer for the personal use. For more 

information, see Pub. 463.

For other listed property (such as computers placed in 

service before 2018 or video equipment), allocate the use 

based on the most appropriate unit of time the property is 

actually used (rather than merely being available for use).

If during the tax year you convert property used solely for 

personal purposes to business/investment use (or vice 

versa), figure the percentage of business/investment use only 

for the number of months you use the property in your 

business or for the production of income. Multiply that 

percentage by the number of months you use the property in 

your business or for the production of income, and divide the 

result by 12.

Column (d)—Cost or other basis. Enter the property's 

actual cost (including sales tax) or other basis (unadjusted for 

prior years' depreciation). If you traded in old property, see 

Property acquired in a like-kind exchange or involuntary 

conversion, earlier.

For a vehicle, reduce your basis by any qualified electric 

vehicle credit you claimed for property placed in service 

before January 1, 2007, or by any alternative motor vehicle 

credit allowed.

If you converted the property from personal use to 

business/investment use, your basis for depreciation is the 

smaller of the property's adjusted basis or its fair market 

value on the date of conversion.

12 Instructions for Form 4562 (2023)
Column (e)—Basis for depreciation (business/investment use only). Multiply column (d) by the percentage in 

column (c). From that result, subtract any section 179 

expense deduction, any special depreciation allowance, any 

credit for employer-provided childcare facilities and services, 

and half of any investment credit taken before 1986 (unless 

you claimed the reduced credit). For automobiles and other 

listed property placed in service after 1985 (that is, transition 

property), reduce the depreciable basis by the entire 

investment credit.

Column (f)—Recovery period. Enter the recovery period. 

For property placed in service after 1986 and used more than 

50% in a qualified business use, use the table in the 

instructions for line 19, column (d). For property placed in 

service after 1986 and used 50% or less in a qualified 

business use, depreciate the property using the straight line 

method over its ADS recovery period. The ADS recovery 

period is 5 years for automobiles and computers.

Column (g)—Method/convention. Enter the method and 

convention used to figure your depreciation deduction. See 

the instructions for line 19, columns (e) and (f). Enter “200 

DB,” “150 DB,” or “S/L” for the depreciation method, and “HY,” 

“MM,” or “MQ” for half-year, mid-month, or mid-quarter 

conventions, respectively. For property placed in service 

before 1987, enter “PRE” if you used the prescribed 

percentages under ACRS. If you elected an alternate 

percentage or if you are required to depreciate the property 

using the straight line method, enter “S/L.”

Column (h)—Depreciation deduction. See Limits for 

passenger automobiles, later, before entering an amount in 

column (h).

For property used more than 50% in a qualified business 

use (line 26) and placed in service after 1986, figure column 

(h) by following the instructions for line 19, column (g). If 

placed in service before 1987, multiply column (e) by the 

applicable percentage given in Pub. 534 for ACRS property. If 

the recovery period for an automobile ended before your tax 

year beginning in 2023, enter your unrecovered basis, if any, 

in column (h).

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

(line 27) and placed in service after 1986, figure column (h) 

by dividing the amount in column (e) by the amount in column 

(f). Use the same conventions as discussed in the 

instructions for line 19, column (e). The amount in column (h) 

cannot exceed the property's unrecovered basis. If the 

recovery period for an automobile ended before your tax year 

beginning in 2023, enter your unrecovered basis, if any, in 

column (h).

For property placed in service before 1987 that was 

disposed of during the year, enter zero.

Limits for passenger automobiles. The depreciation 

deduction, including the section 179 expense deduction and 

special depreciation allowance, for passenger automobiles is 

limited. For any passenger automobile (including an electric 

passenger automobile) you list on line 26 or line 27, the total 

of columns (h) and (i) on line 26 or 27 and column (h) on 

line 25 for that automobile cannot exceed the applicable limit 

shown in Table 1, 2, 3, or 4. If the business/investment use 

percentage in column (c) for the automobile is less than 

100%, you must reduce the applicable limit to an amount 

equal to the limit multiplied by that percentage. For example, 

for an automobile (including a truck or van) placed in service 

in 2023 (for which you elect not to claim any special 

depreciation allowance) that is used 60% for business/

investment, the limit is $7,320 ($12,200 x 60% (0.60)).

For purposes of the limits for passenger automobiles, the 

following apply.

• Passenger automobiles are 4-wheeled vehicles 

manufactured primarily for use on public roads that are rated 

at 6,000 pounds unloaded gross vehicle weight or less (for a 

truck or van, gross vehicle weight is substituted for unloaded 

gross vehicle weight).

• Electric passenger automobiles are vehicles produced by 

an original equipment manufacturer and designed to run 

primarily on electricity, placed in service after August 5, 1997, 

and before January 1, 2007.

Exception. The following vehicles are not considered 

passenger automobiles.

• An ambulance, hearse, or combination ambulance-hearse 

used in your trade or business.

• A vehicle used in your trade or business of transporting 

persons or property for compensation or hire.

• Any truck or van placed in service after July 6, 2003, that is 

a qualified nonpersonal use vehicle. A truck or van is a 

qualified nonpersonal use vehicle only if it has been specially 

modified with the result that it is not likely to be used more 

than a de minimis amount for personal purposes. For 

example, a van that has only a front bench for seating, in 

which permanent shelving has been installed, that constantly 

carries merchandise or equipment, and that has been 

specially painted with advertising or the company's name, is 

a vehicle not likely to be used more than a de minimis amount 

for personal purposes.

Exception for leasehold property. The business use 

requirement and the limits for passenger automobiles 

generally do not apply to passenger automobiles leased or 

held by anyone regularly engaged in the business of leasing 

passenger automobiles.

For a detailed discussion on passenger automobiles, 

including leased automobiles, see Pub. 463.

Table 1—Limits for Passenger Automobiles 

(including trucks and vans) Acquired Before 

September 28, 2017, and Placed in Service Before 

2020

IF you placed your 

automobile in service:

AND the 

number of tax years in 

which this automobile 

has been

in service is:

THEN the

limit on your 

depreciation and 

section 179 expense

deduction is:

Jan. 1–Dec. 31, 2018 3 $9,600

4 or more $5,760

Jan. 1–Dec. 31, 2019 3 $9,700

4 or more $5,760

Instructions for Form 4562 (2023) 13
Table 2—Limits for Passenger Automobiles 

(including trucks and vans) Acquired After 

September 27, 2017, and Placed in Service Before 

2024

IF you placed 

your automobile

in service:

AND the 

number of 

tax years in 

which this 

automobile has 

been in 

service is:

THEN the limit on 

your depreciation 

and section 179 

expense deduction 

is:

Jan. 1–Dec. 31, 2018

3  $9,600

4 or more $5,760

Jan. 1–Dec. 31, 2019 

3  $9,700

4 or more $5,760

Jan. 1–Dec. 31, 2020 

3  $9,700

4 or more $5,760

Jan. 1–Dec. 31, 2021 

3  $9,800

4 or more $5,860

Jan. 1–Dec. 31, 2022 

2  $18,000

3 $10,800

Jan. 1–Dec. 31, 2023 

1 $12,200*

2 $19,500

* If you take the special depreciation allowance for qualified passenger automobiles 

acquired after September 27, 2017, and placed in service in 2023, the limit is $20,200. 

Table 3—Limits for Passenger Automobiles 

Placed in Service After 2003 and Before 2018 

(excluding trucks and vans placed in service after 

2002 and electric passenger automobiles placed in 

service before January 1, 2007)

IF you placed 

your automobile

in service:

AND the 

number of 

tax years in 

which this 

automobile has 

been in 

service is:

THEN the 

limit on your 

depreciation and 

section 179 expense 

deduction is:

Jan. 1, 2004–Dec. 31, 2005 4 or more $1,675

Jan. 1, 2006–Dec. 31, 2011 4 or more $1,775

Jan. 1, 2012–Dec. 31, 2017 4 or more $1,875

Table 4—Limits for Trucks and Vans Placed in 

Service After 2003 and Before 2018

IF you placed 

your truck or van

in service:

AND the 

number of 

tax years in 

which this truck or 

van has been in 

service is:

THEN the 

limit on your 

depreciation and 

section 179 expense 

deduction is:

Jan. 1, 2004–Dec. 31, 2008 4 or more $1,875

Jan. 1–Dec. 31, 2009 4 or more $1,775

Jan. 1, 2010–Dec. 31, 2012 4 or more $1,875

Jan. 1, 2013–Dec. 31, 2015 4 or more $1,975

Jan. 1–Dec. 31, 2016 4 or more $2,075

Jan. 1–Dec. 31, 2017 3 $3,450

4 or more $2,075

Column (i)—Elected section 179 cost. Enter the amount 

you elect to expense for section 179 property used more than 

50% in a qualified business use (subject to the limits for 

passenger automobiles). Refer to the instructions for Part I to 

determine if the property qualifies under section 179.

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

cost of any SUVs and certain other vehicles placed in service 

during the tax year. 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 persons 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 directly 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.

Recapture of section 179 expense deduction. If you 

used listed property more than 50% in a qualified business 

use in the year you placed the property in service and used it 

50% or less in a later year, you may have to recapture in the 

later year part of the section 179 expense deduction. Use 

Form 4797 to figure the recapture amount.

Section B

Except as noted below, you must complete lines 30 through 

36 for each vehicle identified in Section A. Employees must 

provide their employers with the information requested on 

lines 30 through 36 for each automobile or vehicle provided 

for their use.

Exception. Employers are not required to complete lines 30 

through 36 for vehicles used by employees who are not more 

than 5% owners or related persons and for which the 

question on line 37, 38, 39, 40, or 41 is answered “Yes.”

Section C

Employers providing vehicles to their employees satisfy the 

employer's substantiation requirements under section 274(d) 

by maintaining a written policy statement that:

• Prohibits personal use including commuting, or

• Prohibits personal use except for commuting.

An employee does not need to keep a separate set of 

records for any vehicle that satisfies these written policy 

statement rules.

For both written policy statements, there must be evidence 

that would enable the IRS to determine whether use of the 

vehicle meets the conditions stated below.

Line 37

A policy statement that prohibits personal use (including 

commuting) must meet all of the following conditions.

• The employer owns or leases the vehicle and provides it to 

one or more employees for use in the employer's trade or 

business.

• When the vehicle is not used in the employer's trade or 

business, it is kept on the employer's business premises, 

unless it is temporarily located elsewhere (for example, for 

maintenance or because of a mechanical failure).

14 Instructions for Form 4562 (2023)
• No employee using the vehicle lives at the employer's 

business premises.

• No employee may use the vehicle for personal purposes, 

other than de minimis personal use (for example, a stop for 

lunch between two business deliveries).

• Except for de minimis use, the employer reasonably 

believes that no employee uses the vehicle for any personal 

purpose.

Line 38

A policy statement that prohibits personal use (except for 

commuting) is not available if the commuting employee is an 

officer, director, or 1% or more owner. This policy must meet 

all of the following conditions.

• The employer owns or leases the vehicle and provides it to 

one or more employees for use in the employer's trade or 

business, and it is used in the employer's trade or business.

• For bona fide noncompensatory business reasons, the 

employer requires the employee to commute to and/or from 

work in the vehicle.

• The employer establishes a written policy under which the 

employee may not use the vehicle for personal purposes, 

other than commuting or de minimis personal use (for 

example, a stop for a personal errand between a business 

delivery and the employee's home).

• Except for de minimis use, the employer reasonably 

believes that the employee does not use the vehicle for any 

personal purpose other than commuting.

• The employer accounts for the commuting use by 

including an appropriate amount in the employee's gross 

income.

Line 40

An employer that provides more than five vehicles to its 

employees who are not 5% owners or related persons need 

not complete Section B for such vehicles. Instead, the 

employer must obtain the information from its employees and 

retain the information received.

Line 41

An automobile meets the requirements for qualified 

demonstration use if the employer maintains a written policy 

statement that:

• Prohibits its use by individuals other than full-time 

automobile salespersons,

• Prohibits its use for personal vacation trips,

• Prohibits storage of personal possessions in the 

automobile, and

• Limits the total mileage outside the salesperson's normal 

working hours.

Part VI. Amortization

Each year, you can deduct part of certain capital costs over a 

fixed period.

If you amortize property, the part you amortize does 

not qualify for the section 179 expense deduction or 

for depreciation.

Attach any information the Code and regulations may 

require to make a valid election. See the applicable Code 

section and regulations for more information.

CAUTION

!

Line 42

Complete line 42 only for those costs you amortize for which 

the amortization period begins during your tax year beginning 

in 2023.

Column (a)—Description of costs. Describe the costs you 

are amortizing. You can amortize the following.

Geological and geophysical expenditures (section 

167(h)). You must amortize geological and geophysical 

expenses paid or incurred in connection with the exploration 

or development of oil and gas within the United States ratably 

over a 24-month period, beginning on the midpoint of the tax 

year in which the expenses were paid or incurred. For a major 

integrated oil company (as defined in section 167(h)(5)), the 

costs paid or incurred after December 19, 2007, must be 

amortized ratably over a 7-year period (a 5-year period for 

costs paid or incurred after May 17, 2006, and before 

December 20, 2007).

Pollution control facilities (section 169). You can elect 

to amortize the cost of a certified pollution control facility over 

a 60-month period (84 months for certain atmospheric 

pollution control facilities placed in service after April 11, 

2005). See section 169 and the related regulations for details 

and information required in making the election.

You can deduct a special depreciation allowance on 

a certified pollution control facility that is qualified 

property. However, you must reduce the amount on 

which you figure your amortization deduction by any special 

depreciation allowance allowed or allowable, whichever is 

greater.

Also, a corporation must reduce its amortizable basis of a 

pollution control facility by 20% before figuring the 

amortization deduction.

Bond premium (section 171). For individuals reporting 

amortization of bond premium for taxable bonds acquired 

before October 23, 1986, do not report the deduction here. 

See the instructions for Schedule A (Form 1040), line 16.

For taxpayers (other than corporations) claiming a 

deduction for amortization of bond premium for taxable 

bonds acquired after October 22, 1986, but before January 1, 

1988, the deduction is treated as interest expense and is 

subject to the investment interest limitations. Use Form 4952, 

Investment Interest Expense Deduction, to compute the 

allowable deduction.

For taxable bonds acquired after 1987, you can elect to 

amortize the bond premium over the life of the bond. In 

general, you amortize bond premium on a bond by offsetting 

the stated interest allocable to a tax year with the bond 

premium allocable to that tax year and report the net amount 

of stated interest on your return. See section 171 and 

Regulations sections 1.171-1 through 1.171-5 for more 

information. Individuals, also see Pub. 550, Investment 

Income and Expenses. A bond premium carryforward as of 

the end of a taxpayer’s final accrual period is treated as a 

deduction. See Regulations section 1.171-2(a)(4)(i)(C). For 

an individual, do not report the deduction here. See the 

instructions for Schedule A (Form 1040), line 16.

Research and experimental expenditures (section 

174). You must capitalize and amortize specified research 

and experimental costs paid or incurred in tax years 

beginning in 2023 ratably over a 5-year period (a 15-year 

period for specified research and experimental expenditures 

attributable to foreign research conducted outside the United 

States, Puerto Rico, or any territory of the United States) 

CAUTION

!

Instructions for Form 4562 (2023) 15
beginning with the mid-point of the tax year in which the 

expenditures were paid or incurred. This includes any 

amounts paid or incurred in connection with the development 

of software. For more information, see section 174.

The cost of acquiring a lease (section 178). If you get 

a lease for business property, you may recover the cost of 

acquiring the lease by amortizing it over the term of the lease. 

The term of the lease for amortization purposes generally 

includes all renewal options (and any other period for which 

you and the lessor reasonably expect the lease to be 

renewed). However, renewal periods aren't included if 75% or 

more of the cost of acquiring the lease is for the term of the 

lease remaining on the acquisition date (not including any 

period for which you may choose to renew, extend, or 

continue the lease). See section 178.

Qualified forestation and reforestation costs (section 

194). You can elect to deduct a limited amount of qualifying 

reforestation costs paid or incurred during the tax year for 

each qualified timber property. You can elect to amortize the 

qualifying costs that are not deducted currently over an 

84-month period. There is no limit on the amount of your 

amortization deduction for reforestation costs paid or incurred 

during the tax year.

If you are otherwise required to file Form T (Timber), 

Forest Activities Schedule, you can make the election to 

amortize qualifying reforestation costs by completing Part IV 

of the form. See the Instructions for Form T (Timber) for more 

information.

See section 194. Partnerships and S corporations, also 

see the instructions for line 44.

Optional write-off of certain tax preferences over the 

period specified in section 59(e). You can elect to 

amortize certain tax preference items over an optional period. 

If you make this election, there is no AMT adjustment for 

these expenditures. The applicable expenditures and the 

optional recovery periods are as follows.

• Circulation expenditures (section 173)—3 years.

• Intangible drilling and development costs (section 

263(c))—60 months.

• Mining exploration and development costs (sections 

616(a) and 617(a))—10 years.

• Research and experimental expenditures paid or incurred 

in tax years beginning before January 1, 2022 (section 174(a) 

prior to amendment by section 13206(a) of P.L. 115-97)—10 

years. Amortization for these costs should be reported on 

line 43.

See section 59(e). For information on making the election, 

see Regulations section 1.59-1.

Certain section 197 intangibles. The following costs 

must be amortized over 15 years (180 months) starting with 

the later of (a) the month the intangibles were acquired, or (b) 

the month the trade or business or activity engaged in for the 

production of income begins.

• Goodwill.

• Going concern value.

• Workforce in place.

• Business books and records, operating systems, or any 

other information base.

• A patent, copyright, formula, process, design, pattern, 

know-how, format, or similar item.

• A customer-based intangible (for example, composition of 

market or market share).

• A supplier-based intangible.

• A license, permit, or other right granted by a governmental 

unit.

• A covenant not to compete entered into in connection with 

the acquisition of a business.

• A franchise, trademark, or trade name (including 

renewals).

A longer period may apply to section 197 intangibles 

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). See 

section 197(f)(10).

A section 197 intangible is treated as depreciable 

property used in your trade or business. When you 

dispose of a section 197 intangible, any gain on the 

disposition, up to the amount of allowable amortization, is 

recaptured as ordinary income. If multiple section 197 

intangibles are disposed of in a single transaction or a series 

of related transactions, calculate the recapture as if all of the 

section 197 intangibles were a single asset. This rule does 

not apply to section 197 intangibles disposed of for which the 

adjusted basis exceeds the fair market value.

See section 197.

Startup and organizational costs. You can elect to 

amortize the following costs for setting up your business.

• Business startup costs (section 195).

• Organizational costs for a corporation (section 248).

• Organizational costs for a partnership (section 709).

For business startup and organizational costs paid or 

incurred after September 8, 2008, you can elect to deduct a 

limited amount of startup or organizational costs for the year 

that your business begins. You are not required to attach a 

statement to make this election. Once made, the election is 

irrevocable. Any cost not deducted currently must be 

amortized ratably over a 180-month period. The amortization 

period starts with the month you begin business operations. 

See Regulations sections 1.195-1, 1.248-1, and 1.709-1.

For business startup and organizational costs paid or 

incurred after October 22, 2004, and before September 9, 

2008, you can elect to deduct a limited amount of startup and 

organizational costs for the year that your business begins. If 

the election is made, you must attach any statement required 

by Regulations sections 1.195-1(b), 1.248-1(c), and 

1.709-1(c), as in effect before September 9, 2008. Any costs 

not deducted currently can be amortized ratably over a 

180-month period, beginning with the month you begin 

business.

Note. You can apply the provisions of Regulations sections 

1.195-1, 1.248-1, and 1.709-1 to all expenses paid or 

incurred after October 22, 2004, provided the period of 

limitations on assessment has not expired for the year of the 

election. Otherwise, for business startup and organizational 

costs paid or incurred after October 22, 2004, and before 

September 9, 2008, the provisions under Regulations 

sections 1.195-1(b), 1.248-1(c), and 1.709-1(c), as in effect 

before September 9, 2008, will apply.

For business startup and organizational costs paid or 

incurred before October 23, 2004, you can elect an 

amortization period of 60 months or more.

Attach any statements required by the appropriate section 

and related regulations to Form 4562 by the due date, 

including extensions, of your return for the year in which the 

active trade or business begins. If you have both startup and 

organizational costs, attach a separate statement for each 

type of cost. If you timely filed your return without making the 

election, you can still make the election on an amended 

CAUTION

!

16 Instructions for Form 4562 (2023)
return filed within 6 months of the due date, excluding 

extensions, of the return. Enter “Filed pursuant to section 

301.9100-2” on the amended return.

Creative property costs. These are costs paid or 

incurred to acquire and develop screenplays, scripts, story 

outlines, motion picture production rights to books and plays, 

and other similar properties for purposes of potential future 

film development, production, and exploitation. You may be 

able to amortize creative property costs for properties not set 

for production within 3 years of the first capitalized 

transaction. These costs are amortized ratably over a 15-year 

period under the rules of Rev. Proc. 2004-36, 2004-24 I.R.B. 

1063.

Column (b)—Date amortization begins. Enter the date 

the amortization period begins under the applicable Code 

section. The amortizable amount of a pollution control facility 

is reduced by any special depreciation allowance included on 

line 14 for that facility.

Column (c)—Amortizable amount. Enter the total amount 

you are amortizing. See the applicable Code section for limits 

on the amortizable amount.

Column (d)—Code section. Enter the Code section under 

which you amortize the costs. For examples, see the Code 

sections referenced in the instructions for line 42, column (a), 

earlier.

Column (f)—Amortization for this year. Compute the 

amortization deduction by:

1. Dividing the amount in column (c) by the number of 

months over which the costs are to be amortized and 

multiplying the result by the number of months in the 

amortization period included in your tax year beginning in 

2023, or

2. Multiplying the amount in column (c) by the percentage 

in column (e).

Line 43

If you are reporting the amortization of costs (other than 

research and experimental expenditures) that began before 

your 2023 tax year and you are not required to file Form 4562 

for any other reason, do not file Form 4562. Report the 

amortization directly on the “Other Deductions” or “Other 

Expenses” line of your return.

Note. The amortization deduction and research and 

experimental expenditures under former section 174(b) or the 

dollar amount of research and experimental expenditures for 

which you elected to amortize over the 10-year period under 

section 59(e) must be reported on line 43 of Form 4562. 

Attach a statement that shows (a) a description of the costs; 

(b) the date amortization began; (c) the amortizable amount; 

(d) the applicable Code section; (e) the amortization period; 

(f) the accumulated amortization; and (g) the amortization 

amount for this year.

Line 44

Report the total amortization, including research and 

experimental expenditures paid or incurred in 2023 and prior 

years and the allowable portion of forestation or reforestation 

amortization, on the applicable “Other Deductions” or “Other 

Expenses” line of your return. For partnerships and S 

corporations, report the amortizable basis of any forestation 

or reforestation expenses for which amortization is elected 

and the year in which the amortization begins as a separately 

stated item on Schedules K and K-1 (Form 1065 or 1120-S). 

See the instructions for Schedule K (Form 1065 or 1120-S) 

for more details on how to report.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the 

United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to 

allow us to figure and collect the right amount of tax.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless 

the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as 

their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return 

information are confidential, as required by section 6103.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for 

individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown 

in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown 

below.

Recordkeeping ................................................. 27 hr., 44 min.

Learning about the law or the form.................................... 4 hr., 16 min.

Preparing and sending the form to the IRS .............................. 4 hr., 55 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would 

be happy to hear from you. See the instructions for the tax return with which this form is filed.

Instructions for Form 4562 (2023) 17
Table A—General Depreciation System

If the recovery period is:

Year 3 years 5 years 7 years 10 years

1 33.33% 20.00% 14.29% 10.00%

2 44.45% 32.00% 24.49% 18.00%

3 14.81% 19.20% 17.49% 14.40%

4 7.41% 11.52% 12.49% 11.52%

5 11.52% 8.93% 9.22%

6

7 6.55%

8.92% 7.37%

8.93%

5.76%

8 4.46% 6.55%

9 6.56%

Method: 200% declining balance switching to straight line

Convention: Half-year

10 6.55%

11 3.28%

Table B—General Depreciation System

If the recovery period is:

Year 5 years 7 years 10 years 12 years 15 years 20 years

1 15.00% 10.71% 7.50% 6.25% 5.00% 3.750%

2 25.50% 19.13% 13.88% 11.72% 9.50% 7.219%

3 17.85% 15.03% 11.79% 10.25% 8.55% 6.677%

4 16.66% 12.25% 10.02% 8.97% 7.70% 6.177%

5 16.66% 12.25% 8.74% 7.85% 6.93% 5.713%

6

7

8.33% 12.25%

12.25%

8.74%

8.74%

7.33%

7.33% 5.90%

5.285%

4.888%

8 6.13% 8.74% 7.33% 5.90% 4.522%

9 8.74% 7.33% 5.91% 4.462%

Convention: Half-year

Method: 150% declining balance switching to straight line

10 8.74% 7.33% 5.90% 4.461%

11 4.37% 7.32% 5.91% 4.462%

12 7.33% 5.90% 4.461%

13 3.66%

5.91% 4.462%

14

4.462%

6.23%

5.91% 4.462%

5.90% 4.461%

2.95% 4.461%

4.461%

15

16

17

18

19 4.462%

20 4.461%

21 2.231%

18
Table C—General Depreciation System

The month in the 1st recovery year the property is placed in service:

Year 1 2 3 4 5 6 7 8 9 10 11 12

1 3.485% 3.182% 2.879% 2.576% 2.273% 1.970% 1.667% 1.364% 1.061% 0.758% 0.455% 0.152%

2–9 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636%

Recovery period: 27.5 years

Convention: Mid-month

Method: Straight line

10,12,14,16,18, 20, 22, 24, 26 3.637% 3.637% 3.637% 3.637% 3.637% 3.637% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636%

11,13,15,17,19, 21, 23, 25, 27 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.637% 3.637% 3.637% 3.637% 3.637% 3.637%

Table D—General Depreciation System

The month in the 1st recovery year the property is placed in service:

Year 1 2 3 4 5 6 7 8 9 10 11 12

13,15,17,19, 21, 23, 25, 27, 29, 31 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175%

Recovery period: 31.5 years

Convention: Mid-month

Method: Straight line

3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175%

14,16,18, 20, 22, 24, 26, 28, 30 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174%

Table E—General Depreciation System

The month in the 1st recovery year the property is placed in service:

Year 1 2 3 4 5 6 7 8 9 10 11 12

1 2.461% 2.247% 2.033% 1.819% 1.605% 1.391% 1.177% 0.963% 0.749% 0.535% 0.321% 0.107%

2–39 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564%

Recovery period: 39 years

Convention: Mid-month

Method: Straight line

40 0.107% 0.321% 0.535% 0.749% 0.963% 1.177% 1.391% 1.605% 1.819% 2.033% 2.247% 2.461%

28 1.97% 2.273% 2.576% 2.879% 3.182% 3.485% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636%

32 1.720% 1.984% 2.249% 2.513% 2.778% 3.042% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174%

19
Depreciation

Worksheet (Keep for your records.)

Description of Property

Date

Placed in

Service

Cost or

OtherBasis

Business/

Investment

Use

%

Section 179

Special

Allowance,

and Other

Basis

Reductions

Depreciation Prior

Years

Basis for

Depreciation

Method/

Convention

Recovery

Period

Rate or

Table

%

Depreciation

Deduction

20
Index

A

Alternative Depreciation System:

Basis for depreciation 11

Classification of property 11

Conventions 11

Depreciation deduction 11

Placed in service date 11

Recovery period 11

Alternative minimum tax 3

Amortization 15

Amortizable amount 17

Amortization deduction 17

Amortization of costs from prior 

year 17

Amortization of costs in current 

year 15

Applicable code section 17

Certain bond premiums 15

Cost of acquiring a lease 16

Creative property costs 17

Date amortization begins 17

Description of costs 15

Forestation and reforestation costs 16

Geological and geophysical 

expenditures 15

Optional section 59(e) write-off 16

Pollution control facilities 15

Research and experimental 

expenditures 15

Section 197 intangibles 16

Startup and organizational costs 16

C

Conventions:

Half-year 9

Mid-month 10

Mid-quarter 9

D

Definitions 1

Amortization 2

Commuting 2

Depreciation 1

Listed property 2

Listed property - Exceptions 2

Section 179 property 2

Depreciation:

Accelerated Cost Recovery System 

(ACRS) 7

Assets placed in service in prior 

year 7

General asset accounts 7

Income forecast method 7

Intangible property 7

Listed property 11

Modified Accelerated Cost Recovery 

System (MACRS) 7

Alternative Depreciation 

System 11

General Depreciation System 8

Involuntary conversion 8

Like-kind exchange 8

Other 7

Depreciation methods:

Declining balance 10

Straight line 10

Depreciation tables 18, 19

Depreciation Worksheet 20

E

Election out:

Involuntary conversion 8

Like-kind exchange 8

Special depreciation allowance 6

G

General Depreciation System:

Basis for depreciation 9

Classification of property 8

Conventions 9

Depreciation deduction 10

Determining the classification 9

Placed in service date 9

Recovery period 9

I

Involuntary conversion 8

L

Like-kind exchange 8

Listed property:

Basis for depreciation 13

Convention 13

Cost or other basis 12

Depreciation deduction 13

Information on vehicle use 14

Method 13

Passenger automobile limits 13

Definitions 13

Exception 13

Leasehold property exception 13

Tables 13

Percentage of business or investment 

use 12

Placed in service date 12

Qualified business use 12

Questions for employers on vehicle 

use 14

Recapture of section 179 expense 

deduction 14

Recovery period 13

Section 179 expense deduction 14

Special depreciation allowance 12

Type of property 12

R

Recapture:

Listed property 12, 14

MACRS depreciation 11

Section 179 expense deduction 3, 14

Special depreciation allowance 6

Recordkeeping 3

S

Section 179 expense deduction 3

Carryover of disallowed deduction 4

Election 3

Limitations:

Maximum deduction 3

Sport utility vehicle (SUV) 14

Taxable income 4

Threshold cost of property 4

Listed property 14

Recapture 3, 14

Special depreciation allowance 5

Election out 6

Figuring the allowance 6

Listed property 12

Qualified property 5

Recapture 6

U

Uniform capitalization rules 11

Unit-of-production method 7

W

Where to find additional 

information 1

Who must file 1

21