Regular and Bonus Depreciation-IRC §167, IRC §168

Abstract

Section 167 allows a deduction from federal taxable income for the exhaustion, wear and tear of property used in a trade or business, or of property held for the production of income. Under the Modified Accelerated Cost Recovery System (MACRS) and the Accelerated Cost Recovery System (ACRS) of Section 168, the cost or other basis of an asset is generally recovered over a specific recovery period. MACRS applies to tangible property generally placed in service after 1986 and the Accelerated Cost Recovery System (ACRS) applies to property placed in service after 1980 and before 1987.