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Abstract
IRC 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 IRC 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. An associated chart shows the tax treatment by each state and the District of Columbia of federal depreciation under IRC Section 167 and IRC Section 168, including bonus depreciation under IRC Section 168(k).