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.
MyDepreciation Editorial Team
Tax & Accounting Experts
Last reviewed: March 2026
Our editorial team includes tax professionals and financial analysts who review every calculator and guide for accuracy. All content is cross-referenced with IRS Publication 946 and current tax legislation.