Modified Accelerated Cost Recovery System

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Modified Accelerated Cost Recovery System (MACRS)

A 1986 act that set out rules for the depreciation of qualifying assets, allowing for greater acceleration over longer periods of time.

Modified Accelerated Cost Recovery System

An accounting technique used in the United States to tax a tangible asset based upon its estimated depreciation. The estimated depreciation bears only a rough relationship to an asset's actual life, and is designed to decrease the taxation in the early years of an asset's ownership. The Modified Accelerated Cost Recovery System replaced the Accelerated Cost Recovery System in 1986, and increased the deductions an owner is allowed to take in the early years of ownership. See also: Absolute Physical Life.

Modified Accelerated Cost Recovery System (MACRS)

A depreciation system in which assets are classified according to a prescribed life or recovery period that bears only a rough relationship to their expected economic lives. MACRS represents a 1986 change to the Accelerated Cost Recovery System that was instituted in 1981. The depreciation rates in MACRS are derived from the double-declining-balance method of depreciation.

Modified Accelerated Cost Recovery System (MACRS)

MACRS is the depreciation system used for most property placed in service after December 31, 1986. But ACRS (see Accelerated Cost Recovery System) must be used for certain property acquired from a related party if that property was used by the related party before 1987.

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The Treasury has issued final regulations (Treasury Decision 9314) explaining how to depreciate modified accelerated cost recovery system (MACRS) property that has been acquired in a section 1031 like-kind exchange or through a section 1033 involuntary conversion when both the acquired and relinquished property are subject to MACRS in the hands of the acquiring taxpayer.

Depreciate property in like-kind exchanges consistently: practitioners must give special scrutiny and apply new depreciation matching rules

The rules address how to determine annual depreciation allowances using the modified accelerated cost recovery system (MACRS) under Sec.

Depreciating MACRS property in tax-free exchanges

The Tax Court, citing Internal Revenue Code section 168(f)(1), said the taxpayer could choose not to use the modified accelerated cost recovery system (MACRS) as long as the property was properly depreciated under a method not based on the property's life.

Broader use of the income forecast method

Such property could be depreciated over much shorter, modified accelerated cost recovery system (MACRS) lives.

Cost-segregation studies: good news for clients

Prior to this ruling, Internal Revenue Code section 168 said that under the modified accelerated cost recovery system, property with a class life of 4 to 10 years could not be written off before 5 years and property with a class life of 10 to 15 years could not be written off before 7 years.

Recent depreciation developments

To qualify, the property must fall into one of six categories: (1) property to which the modified accelerated cost recovery system (MACRS) rules apply and which has a recovery period of less than 20 years, (2) computer software not covered by Sec.

GO Zone Act provisions for hurricane victims

The calculation base equals the amount allowable under the modified accelerated cost recovery system (MACRS).

The Contract With America: the new majority in Congress sets out to prove fewer taxes are the cornerstone of economic prosperity

Because it applies only to properties placed in service before 1987, and because such properties had a maximum modified accelerated cost recovery system (MACRS) recovery period of 19 years, they will all be fully depreciated by 2007.

The ins and outs of recapture

Example 2: T placed in service a $160,000 plating machine (7-year property under the modified accelerated cost recovery system (MACRS)) in September 2003.

The ins and outs of recapture

Earlier this year, the Internal Revenue Service issued proposed regulations regarding the modified accelerated cost recovery system (MACRS).

Midquarter depreciation convention

Surprisingly, the AJCA did not extend the 30% or 50% bonus cost recovery regime, thus subjecting assets placed in service after 2004 to normal modified accelerated cost recovery system depreciation and AMT adjustments.

The AJCA's domestic business provisions: the American Jobs Creation Act of 2004 (AJCA) is an expansive piece of legislation touching many types of taxpayers. This article discusses the AJCA provisions that primarily affect U.S. domestic businesses

Prior to the enactment of the modified accelerated cost recovery system (MACRS), the Service ruled that the average useful lives for the initial clearing and grading for electric transmission lines and electric distribution lines were 84 years and 46 years, respectively.