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Estimated Life and ADS Life

Recovery Periods

The Tax Reform Act of 1986 and subsequent tax acts set MACRS recovery periods for the different kinds of property. ACRS recovery periods were also defined by statute. The statutory ACRS and MACRS lives are shown in the following text.

Note: In addition to the recovery periods shown below, qualifying Indian Reservation property must be depreciated over shorter recovery periods than otherwise allowed.

3-Year Property

Three-year property is tangible ACRS or MACRS personal property having a class life of more than 1 year and no more than 4 years. It includes automobiles for which you elect ACRS recovery.

5-Year Property

Five-year property is tangible ACRS or MACRS personal property having a class life of more than 4 years and less than 10 years. The Tax Reform Act of 1986 specifically added most of the following assets to the list of 5-year properties (some were previously 3-year properties). The rules for new farming machinery and equipment were added by the Tax Cuts and Jobs Act of 2017:

  • Automobiles
  • Light-duty trucks (less than 13,000 pounds)
  • Qualified technological equipment
  • Computer-based telephone central office switching equipment
  • Biomass properties that are small power production facilities within the meaning of Section (3)(17)(
  • Property used for research and experimentation
  • Semiconductor manufacturing equipment
  • Geothermal, ocean thermal, solar, and wind energy properties

  • New farming machinery and equipment placed in service after 12/31/2017

7-Year Property

Seven-year property is other tangible ACRS or MACRS property (personal or real) with a class life of 10 to 15 years, inclusive.

10-Year Property

Ten-year property is other tangible ACRS or MACRS property (personal or real) with a class life of 16 to 19 years, inclusive. Single-purpose agricultural structures are included if placed in service after 1986.

15-Year Property

Fifteen-year property includes both personal and real property.

MACRS fifteen-year property is tangible property with a class life of 20 to 24 years, inclusive. It includes (but is not limited to) municipal wastewatertreatment plants and depreciable land improvements (such as sidewalks, roads, fences and landscaping). Qualified leasehold improvements and qualified restaurant property placed in service after October 22, 2004 are also 15-year property, as is qualified retail improvement property placed in service after December 31, 2008.

ACRS fifteen-year property is real property placed in service after 1980 and before March 16, 1984, and low-income housing.

18-Year Property

Eighteen-year property is qualifying ACRS depreciable real property placed in service after March 15, 1984, but before May 9, 1985.

19-Year Property

Nineteen-year property is ACRS depreciable real property acquired after May 8, 1985, but before 1987 that is not low-income housing.

20-Year Property

Twenty-year property is tangible MACRS property, personal or real, with a class life of more than 24 years (excluding 25-year property and real property with a class life of 27.5 years and more). It includes farm buildings and various railroad structures.

25-Year Property

Twenty-five-year property is tangible MACRS property set by the Small Business Job Protection Act of 1996. It is water utility property and municipal sewers that are placed in service after June 12, 1996.

27.5-Year Residential Rental Property

Residential rental property is MACRS depreciable real property for which 80% or more of the gross rental income comes from dwelling units. A dwelling unit is a house (including a manufactured house) or apartment used to provide living accommodations. A unit in a hotel, motel, inn, or other establishment in which more than 50% of the units are used on a transient basis does not qualify as a dwelling unit. If the taxpayer occupies any portion of the building or structure, the gross rental income from the property includes the rental value of the unit the taxpayer occupies.

31.5-Year Nonresidential Real Property

Nonresidential real property is MACRS depreciable real property that is neither residential rental property nor property with an ADS life of less than 27.5 years. This includes MACRS property with no defined ADS life or with an ADS life of 27.5 years or more. It also includes elevators and escalators that are not part of residential rental property.

39-Year Nonresidential Real Property

Nonresidential real property placed in service after May 12, 1993, has a recovery period of 39 years.

Important! To help you determine the correct MACRS recovery period for an asset for the Tax book, you can use the IRS Table link located in Asset Detail. Here you will find an easy-to-use version of the IRS ADR Class Life Table.