ACRS Table Calculations

To calculate ACRS depreciation, you multiply the asset's depreciable basis by a percentage for each year in the recovery period. The percentages, which are specified in Internal Revenue Code tables, vary according to the type of property, the recovery period assigned to the asset, and the date the asset was placed in service.

Personal Property

Personal property uses the half-year convention, which is built into the tables. Under the half-year convention, the tables allow a half year of depreciation in the first year for each asset regardless of the date it was placed in service. ACRS (unlike MACRS) does not allow any depreciation for personal property during the year of disposition.

Real Property

Real property (other than low-income housing) placed in service after 1980 but before March 16, 1984, is automatically assigned a 15-year recovery period. For real property placed in service after March 15, 1984, but before May 9, 1985, the recovery period is 18 years. For real property placed in service after May 8, 1985, but before 1987, the recovery period is 19 years.

To compute the ACRS depreciation deduction for real property, the system multiplies the basis of the property by the appropriate recovery percentage from tables provided by the IRS. Because the recovery period percentage for depreciable real property depends on the month the property is placed in service, the cost recovery percentages vary for each asset.