Support CenterACRS vs. MACRS General Depreciation
🔍 ACRS vs. MACRS General Depreciation
This article explains the difference between ACRS (Accelerated Cost Recovery System) and MACRS (Modified Accelerated Cost Recovery System), including when each system applies and where to find more details from the IRS.
⚠️ Before You Begin
Before you start, it helps to know the general timing rules:
- ACRS applies to property first used before 1987.
- MACRS is the current tax depreciation system and is used for most property placed in service after 1986.
📚 What is ACRS?
ACRS - Accelerated Cost Recovery System (ACRS)
ACRS applies to property first used before 1987. It is the name given to tax rules for getting back (recovering) through depreciation deductions the cost of property used in a trade or business or to produce income. These rules are mandatory and generally apply to tangible property placed in service after 1980 and before 1987. If you placed property in service during this period, you must continue to figure your depreciation under ACRS.
For more information on ACRS, what can and cannot be depreciated under ACRS and how to figure the deduction, see IRS Publication 534 - Accelerated Cost of Recovery System (ACRS).
📚 What is MACRS?
MACRS - Modified Accelerated Cost Recovery System (MACRS)
MACRS is the current tax depreciation system in the United States. Under this system, the capitalized cost (basis) of tangible property is recovered over a specified life by annual deductions for depreciation. MACRS is used to recover the basis of most business and investment property placed in service after 1986. MACRS consists of two depreciation systems, the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). Generally, these systems provide different methods and recovery periods to use in figuring depreciation deductions.
For more information on MACRS, what can and cannot be depreciated under MACRS and how to figure the deduction, see IRS Publication 946 - Figuring Depreciation under MACRS.
📝 Note
To change an asset from MACRS to ACRS or vice versa in , override the Method and Convention on the Fixed Asset worksheet.
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