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
Scale drawing or diagram illustrating the proposed use of a land plat property. ...
Evaluation of the dimensions of a building to determine its ability to meet the needs of the occupants. ...
One of a series of inclined structural supports supporting a roof. ...
Wondering what For Rent By Owner (FRBO) means?It’s the more popular cousin of For Sale By Owner (FSBO). For Rent By Owner (FRBO) are really common; it’s the name we give to ...
A recorded plat defines a subdivision map that you have to file in the county recorder’s office. It will show the location and boundaries of your parcels of land. Knowing this, we can ...
Wood strip on the top of a baseboard. ...
Usually a fairly large site zoned and planned for the purpose of industrial development and located outside the main residential area of a city. Industrial parks normally are provided with ...
A forced sale or forced liquidation typically means an involuntary sale of valuables or property for financial reasons. If an unpredictable or uncontrollable event emerges, a seller must ...
Financing source for new real estate business or turnaround ventures that usually combine much risk with potential for high return. There are various stages of venture capital, such as ...
Have a question or comment?
We're here to help.