Irs publication 946 how to depreciate property

irs publication 946 how to depreciate property

7. How To Get Tax Help

You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.

Contacting your Taxpayer Advocate. If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate.

The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review.

To contact your Taxpayer Advocate:
  • Call the Taxpayer Advocate at 1-877-777-4778.
  • Call, write, or fax the Taxpayer Advocate office in your area.
  • Call 1-800-829-4059 if you are a TTY/TDD user.

For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS.

Free tax services. To find out what services are available, get Publication 910, Guide to Free Tax Services. It contains a list of free tax publications and an index of tax topics. It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics.

Personal computer. With your personal computer and modem, you can access the IRS on the Internet at While visiting our web site, you can:
  • See answers to frequently asked tax questions or request help by e-mail.
  • Download forms and publications or search for forms and publications by topic or keyword.
  • Order IRS products on-line.
  • View forms that may be filled in electronically, print the completed form, and then save the form for recordkeeping.
  • View Internal Revenue Bulletins published in the last few years.
  • Search regulations and the Internal Revenue Code.
  • Receive our electronic newsletters on hot tax issues and news.
  • Learn about the benefits of filing electronically (IRS e-file).
  • Get information on starting and operating a small business.

You can also reach us with your computer using File Transfer Protocol at

TaxFax Service. Using the phone attached to your fax machine, you can receive forms and instructions by calling 703-368-9694. Follow the directions from the prompts. When you order forms, enter the catalog number for the form you need. The items you request will be faxed to you.

For help with transmission problems, call the FedWorld Help Desk at 703-487-4608.

Phone. Many services are available by phone.

  • Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current and prior year forms, instructions, and publications.
  • Asking tax questions. Call the IRS Tax Help Line for Individuals with your tax questions at 1-800-829-1040. Or, if your question pertains to a partnership or corporate return, call the Business and Specialty Tax Help Line at 1-800-829-4933.
  • Solving problems. Take advantage of Everyday Tax Solutions service by calling your local IRS office to set up an in-person appointment at your convenience. Check your local directory assistance or for the numbers.
  • TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
  • TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.

Evaluating the quality of our telephone services. To ensure that IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to sometimes listen in on or record telephone calls. Another is to ask some callers to complete a short survey at the end of the call.

Walk-in. Many products and services are available on a walk-in basis.
  • Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county governments, credit unions, and office supply stores have an extensive collection of products available to print from a CD-ROM or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
  • Services. You can walk in to your local IRS office to ask tax questions or get help with a tax problem. Now you can set up an appointment by calling your local IRS office number and, at the prompt, leaving a message requesting Everyday Tax Solutions help. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience.

Mail. You can send your order for forms, instructions, and publications to the Distribution Center nearest to you and receive a response within 10 workdays after your request is received. Find the address that applies to your part of the country.
  • Western part of U.S.:

Western Area Distribution Center

Rancho Cordova, CA 95743-0001
  • Central part of U.S.:

    Central Area Distribution Center

    P.O. Box 8903

    Bloomington, IL 61702-8903
  • Eastern part of U.S. and foreign addresses:

    Eastern Area Distribution Center

    P.O. Box 85074

    Richmond, VA 23261-5074

  • CD-ROM for tax products. You can order IRS Publication 1796, Federal Tax Products on CD-ROM, and obtain:

    • Current tax forms, instructions, and publications.
    • Prior-year tax forms and instructions.
    • Popular tax forms that may be filled in electronically, printed out for submission, and saved for recordkeeping.
    • Internal Revenue Bulletins.

    The CD-ROM can be purchased from National Technical Information Service (NTIS) by calling 1-877-233-6767 or on the Internet at The first release is available in early January and the final release is available in late February.

    CD-ROM for small businesses. IRS Publication 3207, Small Business Resource Guide, is a must for every small business owner or any taxpayer about to start a business. This handy, interactive CD contains all the business tax forms, instructions and publications needed to successfully manage a business. In addition, the CD provides an abundance of other helpful information, such as how to prepare a business plan, finding financing for your business, and much more. The design of the CD makes finding information easy and quick and incorporates file formats and browsers that can be run on virtually any desktop or laptop computer.

    It is available in March. You can get a free copy by calling 1-800-829-3676 or by visiting the website at

    Table A-1 and A-2

    Table A-3 and A-4

    Table A-5 and A-6

    Table A-8 (continued)

    Table A-9 (continued)

    Table A–10 (continued)

    Table A-11 (continued)

    Table A-12 (continued)

    Table A-13, A-14 and A-14 (continued.1)

    Table A-14 (continued.2)

    Table A-15 (continued)

    Table A-16 (continued)

    Table A-17 (continued)

    Table A-18 (continued)

    Table A-19 and Table A-20

    Appendix B - Table of Class Lives and Recovery Periods

    The Table of Class Lives and Recovery Periods has two sections. The first section, Specific Depreciable Assets Used In All Business Activities, Except As Noted, generally lists assets used in all business activities. It is shown as Table B-1. The second section, Depreciable Assets Used In The Following Activities, describes assets used only in certain activities. It is shown as Table B-2.

    How To Use the Tables

    You will need to look at both Table B-1 and B-2 to find the correct recovery period. Generally, if the property is listed in Table B-1 you use the recovery period shown in that table. However, if the property is specifically listed in Table B-2 under the type of activity in which it is used, you use the recovery period listed under the activity in that table. Use the tables in the order shown below to determine the recovery period of your depreciable property.

    Table B-1. Check Table B-1 for a description of the property. If it is described in Table B-1, also check Table B-2 to find the activity in which the property is being used. If the activity is described in Table B-2, read the text (if any) under the title to determine if the property is specifically included in that asset class. If it is, use the recovery period shown in the appropriate column of Table B-2 following the description of the activity. If the activity is not described in Table B-2 or if the activity is described but the property either is not specifically included in or is specifically excluded from that asset class, then use the recovery period shown in the appropriate column following the description of the property in Table B-1.

    Table B-2. If the property is not listed in Table B-1, check Table B-2 to find the activity in which the property is being used and use the recovery period shown in the appropriate column following the description.

    Property not in either table. If the activity or the property is not included in either table, check the end of Table B-2 to find Certain Property for Which Recovery Periods Assigned. This property generally has a recovery period of 7 years for GDS or 12 years for ADS. For residential rental property and nonresidential real property, see Appendix A, Chart 2, or Which Recovery Period Applies? in chapter 4 for recovery periods for both GDS and ADS.

    Example 1. Richard Green is a paper manufacturer. During the year, he made substantial improvements to the land on which his paper plant is located. He checks Table B-1 and finds land improvements under asset class 00.3. He then checks Table B-2 and finds his activity, paper manufacturing, under asset class 26.1, Manufacture of Pulp and Paper. He uses the recovery period under this asset class because it specifically includes land improvements. The land improvements have a 13-year class life and a 7-year recovery period for GDS. If he elects to use ADS, the recovery period is 13 years. If Richard only looked at Table B-1, he would select asset class 00.3

    Land Improvements and incorrectly use a recovery period of 15 years for GDS or 20 years for ADS.

    Example 2. Sam Plower produces rubber products. During the year, he made substantial improvements to the land on which his rubber plant is located. He checks Table B-1 and finds land improvements under asset class 00.3. He then checks Table B-2 and finds his activity, producing rubber products, under asset class 30.1 Manufacture of Rubber Products. Reading the headings and descriptions under asset class 30.1, Sam finds that it does not include land improvements. Therefore, Sam uses the recovery period under asset class 00.3. The land improvements have a 20-year class life and a 15-year recovery period for GDS. If he elects to use ADS, the recovery period is 20 years.

    Example 3. Pam Martin owns a retail clothing store. During the year, she purchased a desk and a cash register for use in her business. She checks Table B-1 and finds office furniture under asset class 00.11. Cash registers are not listed in any of the asset classes in Table B-1. She then checks Table B-2 and finds her activity, retail store, under asset class 57.0, Distributive Trades and Services, which includes assets used in wholesale and retail trade . This asset class does not specifically list office furniture or a cash register. She looks back at Table B-1 and uses asset class 00.11 for the desk. The desk has a 10-year class life and a 7-year recovery period for GDS. If she elects to use ADS, the recovery period is 10 years. For the cash register, she uses asset class 57.0 because cash registers are not listed in Table B-1 but it is an asset used in her retail business. The cash register has a 9-year class life and a 5-year recovery period for GDS. If she elects to use the ADS method, the recovery period is 9 years.

    Abstract fees: Expenses generally paid by a buyer to research the title of real property.

    Active conduct of a trade or business: Generally, for the section 179 deduction, a taxpayer is considered to conduct a trade or business actively if he or she meaningfully participates in the management or operations of the trade or business. A mere passive investor in a trade or business does not actively conduct the trade or business.

    Adjusted basis: The original cost of property, plus certain additions and improvements, minus certain deductions such as depreciation allowed or allowable and casualty losses.

    Amortization: A ratable deduction for the cost of intangible property over its useful life.

    Amount realized: The total of all money received plus the fair market value of all property or services received from a sale or exchange. The amount realized also includes any liabilities assumed by the buyer and any liabilities to which the property transferred is subject, such as real estate taxes or a mortgage.

    Basis: A measure of an individual's investment in property for tax purposes.

    Business/investment use: Usually, a percentage showing how much an item of property, such as an automobile, is used for business and investment purposes.

    Capitalized: Expended or treated as an item of a capital nature. A capitalized amount is not deductible as a current expense and must be included in the basis of property.

    Circumstantial evidence: Details or facts which indirectly point to other facts.

    Class life: A number of years that establishes the property class and recovery period for most types of property under the General Depreciation System (GDS) and Alternative Depreciation System (ADS).

    Clean-fuel vehicle property: Either of the following kinds of property.
    1. Motor vehicles produced by an original equipment manufacturer and designed to be propelled by a clean-burning fuel.
    2. Any property installed on a motor vehicle to enable it to be propelled by a clean-burning fuel if:
      1. The property is an engine (or modification of an engine) that can use a clean-burning fuel, or
      2. The property is used to store or deliver that fuel to the engine or to exhaust gases from the combustion of that fuel.
    Clean-fuel vehicle refueling property: Any property (other than a building or its structural components) used to:
    • Store or dispense a clean-burning fuel into the fuel tank of a motor vehicle propelled by the fuel, but only if the storage or dispensing is at the point where the fuel is delivered into the tank, or
    • Recharge motor vehicles propelled by electricity, but only if the property is located at the point where the vehicles are recharged.

    Commuting: Travel between a personal home and work or job site within the area of an individual's tax home.

    Convention: A method established under the Modified Accelerated Cost Recovery System (MACRS) to determine the portion of the year to depreciate property both in the year the property is placed in service and in the year of disposition.

    Declining balance method: An accelerated method to depreciate property. The General Depreciation System (GDS) of MACRS uses the 150% and 200% declining balance methods for certain types of property. A depreciation rate (percentage) is determined by dividing the declining balance percentage by the recovery period for the property.

    Disposition: The permanent withdrawal from use in a trade or business or from the production of income.

    Documentary evidence: Written records that establish certain facts.

    Exchange: To barter, swap, part with, give, or transfer property for other property or services.

    Fair market value (FMV): The price that property brings when it is offered for sale by one who is willing but not obligated to sell, and is bought by one who is willing or desires to buy but is not compelled to do so.

    Fiduciary: The one who acts on behalf of another as a guardian, trustee, executor, administrator, receiver, or conservator.

    Fungible commodity: A commodity of a nature that one part may be used in place of another part.

    Goodwill: An intangible property such as the advantage or benefit received in property beyond its mere value. It is not confined to a name but can also be attached to a particular area where business is transacted, to a list of customers, or to other elements of value in business as a going concern.

    Grantor: The one who transfers property to another.

    Improvement: An addition to or partial replacement of property that adds to its value, appreciably lengthens the time you can use it, or adapts it to a different use.

    Intangible property: Property that has value but cannot be seen or touched, such as goodwill, patents, copyrights, and computer software.

    Listed property: Passenger automobiles, any other property used for transportation, property of a type generally used for entertainment, recreation or amusement, computers and their peripheral equipment (unless used only at a regular business establishment and owned or leased by the person operating the establishment), and cellular telephones or similar telecommunications equipment.

    Nonresidential real property: Most real property other than residential rental property.

    Placed in service: Ready and available for a specific use whether in a trade or business, the production of income, a tax-exempt activity, or a personal activity.

    Property class: A category for property under MACRS. It generally determines the depreciation method, recovery period, and convention.

    Recapture: To include as income on your return an amount allowed or allowable as a deduction in a prior year.

    Recovery period: The number of years over which the basis of an item of property is recovered.

    Remainder interest: That part of an estate that is left after all the other provisions of a will have been satisfied.

    Residential rental property: Real property, generally buildings or structures, if 80% or more of its annual gross rental income is from dwelling units.

    Salvage value: An estimated value of property at the end of its useful life. Not used under MACRS.

    Section 1245 property: Property that is or has been subject to an allowance for depreciation or amortization. Section 1245 property includes personal property, single purpose agricultural and horticultural structures, storage facilities used in connection with the distribution of petroleum or primary products of petroleum, and railroad grading or tunnel bores.

    Section 1250 property: Real property (other than section 1245 property) which is or has been subject to an allowance for depreciation.

    Standard mileage rate: The established amount for optional use in determining a tax deduction for automobiles instead of deducting depreciation and actual operating expenses.

    Straight line method: A way to figure depreciation for property that ratably deducts the same amount for each year in the recovery period. The rate (in percentage terms) is determined by dividing 1 by the number of years in the recovery period.

    Structural components: Parts that together form an entire structure, such as a building. The term includes those parts of a building such as walls, partitions, floors, and ceilings, as well as any permanent coverings such as paneling or tiling, windows and doors, and all components of a central air conditioning or heating system including motors, compressors, pipes and ducts. It also includes plumbing fixtures such as sinks, bathtubs, electrical wiring and lighting fixtures, and other parts that form the structure.

    Tangible property: Property you can see or touch, such as buildings, machinery, vehicles, furniture, and equipment.

    Tax-exempt: Not subject to tax.

    Term interest: A life interest in property, an interest in property for a term of years, or an income interest in a trust. It generally refers to a present or future interest in income from property or the right to use property that terminates or fails upon the lapse of time, the occurrence of an event or the failure of an event to occur.

    Unadjusted basis: The basis of an item of property for purposes of figuring gain on a sale without taking into account any depreciation taken in earlier years but with adjustments for amortization, the section 179 deduction, any special depreciation allowance (or Liberty Zone depreciation allowance), any deduction claimed for clean-fuel vehicles or clean-fuel vehicle refueling property, and any electric vehicle credit.

    Unit-of-production method: A way to figure depreciation for certain property. It is determined by estimating the number of units that can be produced before the property is worn out. For example, if it is estimated that a machine will produce 1000 units before its useful life ends, and it actually produces 100 units in a year, the percentage to figure depreciation for that year is 10% of the machine's cost less its salvage value.

    Useful life: An estimate of how long an item of property can be expected to be usable in trade or business or to produce income.


    Category: Taxes

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