Calculate Your MACRS Depreciation Schedule
Personal property defaults to the half-year convention (GDS 200% declining balance).
Year 1 Deduction
$20,000
Average Annual Deduction
$16,667
Total Depreciation
$100,000
| Year | MACRS Rate | Depreciation | Cumulative | Remaining Basis |
|---|---|---|---|---|
| 1 | 20.00% | $20,000.00 | $20,000.00 | $80,000.00 |
| 2 | 32.00% | $32,000.00 | $52,000.00 | $48,000.00 |
| 3 | 19.20% | $19,200.00 | $71,200.00 | $28,800.00 |
| 4 | 11.52% | $11,520.00 | $82,720.00 | $17,280.00 |
| 5 | 11.52% | $11,520.00 | $94,240.00 | $5,760.00 |
| 6 | 5.76% | $5,760.00 | $100,000.00 | $0.00 |
Disclaimer: This calculator is for informational and educational purposes only. It does not constitute tax, legal, or financial advice. Results are based on standard IRS MACRS tables and may not reflect your specific tax situation. Consult a qualified tax professional for guidance on your depreciation deductions.
How to Use This MACRS Calculator
This calculator generates a complete MACRS depreciation schedule based on the IRS percentage tables published in IRS Publication 946. Follow these steps to calculate your depreciation:
- Enter the asset cost — This is the depreciable basis, which typically equals the purchase price plus any costs to place the asset in service (installation, shipping, setup). Do not include land cost, as land is not depreciable.
- Select the property class — Choose the IRS recovery period that applies to your asset. If you are unsure, see the complete MACRS depreciation guide for asset classification details.
- Review the convention — Personal property (3 to 15-year classes) uses the half-year convention by default. Real property (27.5 and 39-year classes) uses the mid-month convention and requires you to select the month the asset was placed in service.
- Read the schedule — The table shows the annual depreciation deduction, the cumulative amount deducted, and the remaining undepreciated basis for each year of the recovery period.
MACRS Property Classes Explained
The IRS assigns every depreciable asset to a specific property class based on its expected useful life. Each class has a fixed recovery period and corresponding depreciation percentages. Here is a summary of the most common classes:
3-Year Property
Includes specialized manufacturing tools, certain racehorses, and assets used in certain research and development activities. The short recovery period provides aggressive depreciation in the first two years (33.33% in year 1, 44.45% in year 2).
5-Year Property
Covers automobiles, light trucks, computers, peripherals, copiers, and R&D equipment. This is one of the most commonly used classes. With 20% in year 1 and 32% in year 2, over half the asset cost is recovered in just two years.
7-Year Property
Applies to office furniture, fixtures, agricultural machinery, and any asset not designated to another class. If you cannot determine the correct class for an asset, the IRS defaults to 7-year property.
15-Year Property
Covers land improvements such as sidewalks, roads, fences, parking lots, landscaping, and certain retail motor fuels outlets. Uses the 150% declining balance method rather than 200%.
27.5-Year Residential Rental Property
Applies to residential rental buildings and structural components. Uses straight-line depreciation with a mid-month convention. The first and last year deductions are prorated based on the month the property is placed in service.
39-Year Nonresidential Real Property
Covers commercial office buildings, retail stores, warehouses, and other nonresidential structures placed in service after May 12, 1993. Also uses straight-line depreciation with the mid-month convention. A cost segregation study can reclassify building components into shorter-lived property classes to accelerate deductions.
For a complete reference of all property classes with asset examples and IRS rate tables, see our MACRS Depreciation: Complete Guide to Schedules, Calculations & Tax Strategies.
Understanding Depreciation Conventions
MACRS depreciation conventions determine how much depreciation is allowed in the first and last year of an asset's recovery period. The convention you use depends on the type of property and when it was placed in service.
Half-Year Convention
The half-year convention is the default for most personal property (3, 5, 7, 10, 15, and 20-year classes). It treats all assets as if they were placed in service at the midpoint of the tax year, regardless of the actual date. This means the first year depreciation is half of what the full-year calculation would produce, and an extra partial year is added at the end of the recovery period.
Mid-Quarter Convention
The mid-quarter convention applies when more than 40% of all personal property placed in service during the year is placed in service in the last quarter (October through December). When this convention applies, assets are treated as placed in service at the midpoint of the quarter in which they were actually placed in service. This calculator uses the half-year convention for personal property. If the mid-quarter convention applies to your situation, consult IRS Publication 946 for the applicable rate tables, or refer to our complete MACRS guide with mid-quarter tables.
Mid-Month Convention
The mid-month convention applies to all real property (27.5 and 39-year classes). It treats property as placed in service at the midpoint of the month it is actually placed in service. This calculator applies the mid-month convention automatically when you select a real property class and specify the month.
Calculator Limitations
This calculator provides standard MACRS depreciation schedules based on IRS rate tables. It is designed to help with planning and estimation. Be aware of the following limitations:
- Section 179 expensing is not included. Section 179 allows businesses to deduct the full cost of qualifying assets (up to annual limits) in the year they are placed in service. If you elect Section 179, only the remaining basis after the Section 179 deduction is depreciated under MACRS.
- Bonus depreciation is not included. Under current tax law, bonus depreciation allows an additional first-year deduction on qualifying new property. This calculator does not factor in bonus depreciation percentages, which are being phased down.
- Mid-quarter convention adjustments are simplified. This calculator uses the half-year convention for personal property. If more than 40% of your personal property was placed in service in Q4, the mid-quarter convention may apply and produce different results.
- Dispositions and partial-year adjustments. If an asset is disposed of before the end of its recovery period, the depreciation in the year of disposition is subject to additional rules not reflected in this calculator.
- ADS (Alternative Depreciation System) is not covered. Some assets and situations require ADS rather than GDS. ADS uses longer recovery periods and straight-line depreciation. See our MACRS guide for ADS tables.
- This is not tax advice. This calculator is for informational and educational purposes only. Tax depreciation involves many factors specific to your situation. Always consult a qualified tax professional before making depreciation decisions.
For organizations with large fixed asset portfolios, CPCON Group provides comprehensive fixed asset management services including depreciation analysis, asset register reconciliation, and cost segregation studies that can significantly accelerate depreciation deductions on commercial real property.
