What is MACRS?
Introduced in 1986, MACRS allows businesses to recover the cost basis of certain property through depreciation deductions. It typically allows for faster depreciation in the early years of an asset's life compared to the straight-line method.
Asset Class
Determines the "Recovery Period" or useful life (e.g., 3, 5, 7, 27.5 years).
Depreciation Method
GDS (General Depreciation System) is most common, typically using 200% or 150% declining balance switching to straight line.
Convention
Rules for when recovery period begins (e.g., Half-Year, Mid-Quarter, Mid-Month).
Common Property Classes (GDS)
| Class Life | Common Examples |
|---|---|
| 3-Year | Tractor units for over-the-road use, race horses > 2 years old. |
| 5-Year | Automobiles, taxis, buses, trucks, computers, office machinery. |
| 7-Year | Office furniture and fixtures, agricultural machinery. |
| 27.5-Year | Residential rental property. |
| 39-Year | Non-residential real property. |
How to Calculate
While you can calculate it manually using formulas, the IRS provides percentage tables (e.g., Rev. Proc. 87-57) which simplify the process. Our MACRS Calculator uses these standard GDS Half-Year convention tables.
Example: 5-Year Property
For an asset costing $10,000:
- Year 1 (20%): $2,000 deduction
- Year 2 (32%): $3,200 deduction
- Year 3 (19.2%): $1,920 deduction
- ...and so on until fully depreciated.
Sources & References
MyDepreciation Editorial Team
Editorial Team
Last updated: July 2026
Content is written and maintained by the MyDepreciation editorial team, based on IRS Publication 946, Publication 527, and other cited primary sources. This is not tax advice — consult a licensed tax professional for your specific situation.