19. Depreciation: Business & Income-Producing Property

Section 167 and its underlying regulations provide general rules for claiming depreciation deductions for business property or property held for the production of income. Section 168 sets for more specific rules that make up the accelerated cost recovery system (ACRS). Section 179 provides still other guidelines for electing to currently expense the cost of certain property.

The Service, in Publication 946, explains how to recover the cost of business or income-producing property through depreciation. It describes depreciation in general terms, explains the sorts of property that may or may not be depreciated, and it defines the modified ACRS (or MACRS). Publication 946 also provides a definition of "listed property" (see Section 280F(d)(4)), as well as extensive examples. And finally, the publication contains two important appendices, the first containing MACRS percentage tables and the second containing class lives and recovery periods.

Appendix A -- MACRS Percentage Table Guide General Depreciation System (GDS) Alternative Depreciation System (ADS).

Appendix B -- Table B-1, Specific Depreciable Assets  Used In All Business Activities, Except As Noted

Table B-2, Depreciable Assets Used In The Following Activities