This chapter discusses the Modified Accelerated Cost Recovery
System (MACRS). It contains the following sections.
- MACRS Defined. This section defines MACRS. It
discusses both MACRS systems, the General Depreciation System (GDS)
and the Alternative Depreciation System (ADS).
- What Can Be Depreciated Under MACRS. This section
identifies what you can depreciate under MACRS, when to use GDS, and
when to use ADS.
- What Cannot Be Depreciated Under MACRS. This
section identifies property you cannot depreciate under MACRS.
- Election To Exclude Property From MACRS. This
section explains how you make an election to exclude certain property
from MACRS.
- How To Figure the Deduction Using Percentage Tables.
This section discusses how to figure your MACRS deduction using
the MACRS percentage tables. It explains basis, property classes and
recovery periods, placed-in-service date, conventions, depreciation
methods, and the MACRS percentage tables. It provides examples and
contains a MACRS Worksheet to help you prepare Form
4562.
- How To Figure the Deduction Without Using the Tables.
This section explains how you can figure your MACRS deduction
without using the rates in the percentage tables. It discusses the
various depreciation methods you can use. Further, it discusses
conventions and how to apply them. This section contains numerous
examples employing different depreciation methods. Lastly, it
discusses how you can take a MACRS deduction in a short tax
year.
- Dispositions. This section discusses how you
depreciate property in the year of disposition if you dispose of it
before the end of the recovery period. It discusses the different ways
of figuring depreciation depending on the convention you used. This
section also briefly discusses depreciation recapture.
- General Asset Account. This section discusses how
you depreciate property in a general asset account. It also tells you
how to group assets that you place in a general asset account. Also
included in this section is a discussion on how you treat property in
a general asset account when you transfer ownership or permanently
withdraw it from use in your trade or business or from the production
of income. Finally, this section discusses how you make the election
to use a general asset account.
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