About the MACRS Depreciation Calculator
This MACRS depreciation calculator builds the year-by-year federal tax depreciation schedule for business or rental property under the General Depreciation System (GDS). Choose the recovery class — 3, 5, 7, 10, 15 or 20-year personal property, 27.5-year residential rental property or 39-year nonresidential real property — and the convention, and it produces the same percentages as the IRS tables in Publication 946, Appendix A, applied to your cost.
Personal property uses the 200% declining balance method (150% for 15- and 20-year property) with a switch to straight line when that gives a larger deduction, under the half-year convention or, if more than 40% of the year’s purchases were placed in service in the last quarter, the mid-quarter convention. Buildings use straight line with the mid-month convention based on the month placed in service.
You can also take a Section 179 deduction and bonus (special) depreciation before MACRS. For property acquired after January 19, 2025, bonus depreciation is back at 100% (you can elect out by class, and for the first tax year ending after January 19, 2025 you could elect 40% instead); property acquired before January 20, 2025 keeps the old phase-down — 40% if placed in service in 2025 and 20% in 2026; the 2026 Section 179 limit is $2,560,000, phased out above $4,090,000 of purchases. The calculator applies them to personal property only, and assumes the asset is used more than 50% for business. Listed property used 50% or less for business, and property under the Alternative Depreciation System (ADS), use different rules.
With the default inputs, the first-year deduction is $7,142.86. Change any value above to recalculate instantly.
How to use the macrs depreciation calculator
- 1Enter the asset’s cost and its business-use percentage.
- 2Choose the recovery period for the type of property.
- 3Pick the convention (or the month placed in service for buildings).
- 4Add any Section 179 deduction and bonus depreciation you plan to claim.
- 5Read the first-year deduction and the full schedule by tax year.
Formula and method
For 3-, 5-, 7- and 10-year property k = 2 (200% declining balance); for 15- and 20-year property k = 1.5. The first-year fraction f is 0.5 under the half-year convention, or 0.875, 0.625, 0.375 or 0.125 for property placed in service in the first to fourth quarter under the mid-quarter convention. Each later year takes the larger of declining balance on the remaining book value or straight line over the remaining recovery period; the final partial year takes whatever is left. This reproduces the percentages in IRS Publication 946 Tables A-1 to A-5.
Residential rental (27.5 years) and nonresidential real property (39 years) use straight line with the mid-month convention: the asset is treated as placed in service in the middle of its month, so year 1 receives (12.5 − month) ÷ 12 of a full year’s deduction (Tables A-6 and A-7a). Section 179 and bonus depreciation are subtracted from the business basis first; MACRS applies to what remains.
- N
- Recovery period in years
- k
- Declining balance factor: 2 (200%) or 1.5 (150%)
- f
- First-year convention fraction
- Book
- Basis not yet depreciated at the start of the year
Worked examples
$50,000 of machinery, 7-year, half-year convention
Seven-year property uses 200% declining balance. Under the half-year convention year 1 is 14.29% of $50,000 = $7,145 and year 2 is 24.49% = $12,245, matching Table A-1. Depreciation runs over eight tax years, ending in 2033.
$300,000 rental building placed in service in March
Residential rental property uses 27.5-year straight line with the mid-month convention. Placed in service in March, year 1 gets 9.5 of 12 months: $300,000 ÷ 27.5 × 9.5/12 = $8,636 (2.879%, Table A-6). Each full year after that is $10,909, and the last 8.5 months ($7,727) fall in 2053, the 28th tax year.
$20,000 computer equipment in 2025 with 40% bonus, Q4 purchase
For 2025 (the first tax year ending after January 19, 2025) a business could elect 40% bonus depreciation instead of 100%; that writes off $8,000 immediately, leaving $12,000 for MACRS. Placed in service in the fourth quarter under the mid-quarter convention, year 1 is 5% ($600) and year 2 is 38% ($4,560), per Table A-5. The first-year deduction totals $8,600.
Frequently asked questions
What is MACRS depreciation?+
MACRS (Modified Accelerated Cost Recovery System) is the depreciation method required for most US business and rental property placed in service after 1986. It assigns each asset a recovery period and method, front-loading deductions for personal property.
When do I have to use the mid-quarter convention?+
You must use the mid-quarter convention for all personal property placed in service during the year if more than 40% of the total depreciable basis of that property was placed in service in the last three months of the tax year. Real property is excluded from the test.
What is the bonus depreciation rate for 2026?+
For qualified property acquired after January 19, 2025, the 2025 tax law permanently restored 100% bonus depreciation. Taxpayers can elect a reduced 40% rate (60% for certain long-production property) for the first tax year ending after January 19, 2025, or elect out by class.
What is the Section 179 limit for 2026?+
For tax years beginning in 2026, the maximum Section 179 expense deduction is $2,560,000, reduced dollar for dollar once qualifying purchases exceed $4,090,000. The deduction can’t exceed taxable income from active business.
How long do you depreciate a rental property?+
Residential rental buildings are depreciated over 27.5 years using straight line and the mid-month convention. Land is never depreciable, so allocate the purchase price between land and building first.
What happens when I sell a depreciated asset?+
Depreciation reduces your basis, so gain on sale is larger. Gain from personal property up to the depreciation taken is taxed as ordinary income (Section 1245 recapture); for real estate, unrecaptured Section 1250 gain is taxed at up to 25%.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.