Modified Accelerated Cost Recovery System (MACRS)
Term given to two depreciation systems defined by the Internal Revenue Service:
- The main system is called the General Depreciation System (GDS). Under GDS, most property is assigned to eight property classes based on their class lives. These property classes provide the recovery period to be used by establishing the number of years over which the basis of an item in a class is recovered.
- The Alternative Depreciation System (ADS) generally provides for a longer recovery period and uses only the straight line method of depreciation to figure your tax deduction.
Both systems establish conventions determining how many months property can be depreciated in the first year it is placed in service and in the year of disposition.
- 20-year property. This class includes property such as farm buildings.
- Residential rental property. This class is comprised of rental buildings or structures for which 80% or more of the gross rental income is from dwelling units. Examples are living in a house or apartment. It excludes hotels and motels. Residential rental property is depreciated over 27.5 years.
- Nonresidential real property. This class includes real property that is not residential rental property. This property is depreciated over 31.5 years.
Popular Real Estate Terms
Legal claim with enough basis in fact to have a lawsuit. ...
Founded in 1857 and located in Washington, DC, with over 54,000 members, throughout the United States, the AIA has 301 local groups in all 50 states. ...
The American Society of Appraisers, also referred to as ASA, is the largest voluntary membership, a multi-discipline trade association that stands for and promotes its appraiser members. ...
Payments made to enhance the appearance and conditions of real estate property. In so doing, the market value of the property should increase. Examples of renovation costs are siding, ...
Same as term development: Process of developing an area by planning and building homes, shopping centers, schools or churches. The development process includes the construction of streets, ...
The prepared form used to specify the terms of the listing contract. Usually a listing form consists of blanks the real estate agent fills in to provide the necessary information needed to ...
Approval given by a local municipality to construct a particular structure at a specific location. The permit may contain certain provisions that require builder compliance. ...
Person or business that obtains mortgages for others by finding suitable lenders. The mortgage broker sometimes deals with collections and disbursements. Typically the mortgage broker ...
A type of property coownership of two or more individuals to whom real property is deeded and who together have an undivided interest in it as a whole. There is only one title to the whole ...
Have a question or comment?
We're here to help.