IRC § 168 MACRS Depreciation

26 U.S.C. § 168

Establishes the Modified Accelerated Cost Recovery System (MACRS) for depreciating tangible property, including real property. Under the general depreciation system, residential rental property is depreciated straight-line over 27.5 years and nonresidential real property over 39 years, both using the mid-month convention; the alternative depreciation system uses 30 years for residential rental property (placed in service after 2017; 40 years before) and 40 years for nonresidential real property. This is the statutory basis for cost-segregation studies that accelerate depreciation of building components.