MACRS Depreciation Method
MACRS stands for Modified Accelerated Cost Recovery System- It is a method of depreciation accepted by IRS (Internal Revenue Service of the U.S. Treasury Department). In MACRS, asset life is not an arbitrary number of years, but one of these six categories: 3, 5, 7, 10, 15 or 20. It is not the expected productive life of the asset but a "life class". For instance, 5-year property (life 5) is for items with expected life longer than 4 years but less than 10 years. For every life class, the MACRS method uses a different table of quotients which sum 1. Expense allocated in every period is obtained multiplying the expense by the quotient defined in the table for that period:
Year |
Tangible 5-Yr MACRS |
Tangible 7-Yr MACRS |
Tangible 15-Yr MACRS |
Capitalized Intangibles |
---|---|---|---|---|
1 | 0.2000 | 0.1429 | 0.0500 | 0.1 |
2 | 0.3200 | 0.2449 | 0.0950 | 0.2 |
3 | 0.1920 | 0.1749 | 0.0855 | 0.2 |
4 | 0.1152 | 0.1249 | 0.0770 | 0.2 |
5 | 0.1152 | 0.0893 | 0.0693 | 0.2 |
6 | 0.576 | 0.0892 | 0.0623 | 0.1 |
7 | 0.0893 | 0.0590 | ||
8 | 0.0446 | 0.0590 | ||
9 | 0.0591 | |||
10 | 0.0590 | |||
11 | 0.0591 | |||
12 | 0.0590 | |||
13 | 0.0591 | |||
14 | 0.0590 | |||
15 | 0.0591 | |||
16 | 0.0295 |