Modified Accelerated Cost Recovery System (MACRS)
Term given to two depreciation systems defined by the Internal Revenue Service:
- The main system is called the General Depreciation System (GDS). Under GDS, most property is assigned to eight property classes based on their class lives. These property classes provide the recovery period to be used by establishing the number of years over which the basis of an item in a class is recovered.
- The Alternative Depreciation System (ADS) generally provides for a longer recovery period and uses only the straight line method of depreciation to figure your tax deduction.
Both systems establish conventions determining how many months property can be depreciated in the first year it is placed in service and in the year of disposition.
- 20-year property. This class includes property such as farm buildings.
- Residential rental property. This class is comprised of rental buildings or structures for which 80% or more of the gross rental income is from dwelling units. Examples are living in a house or apartment. It excludes hotels and motels. Residential rental property is depreciated over 27.5 years.
- Nonresidential real property. This class includes real property that is not residential rental property. This property is depreciated over 31.5 years.
Popular Real Estate Terms
A lessening in the inflation rate. This may occur during a recession when insufficient demand prevents sellers from passing on higher prices to prospective buyers of houses. See also ...
Something coming before. Examples are the year before, first lien on property, and previous owner of property. ...
One who has committed a tort. A tort is a civil wrong that occurs as a result of a breach of legal duty owed to someone, e.g., negligence. A tort does not arise from a breach of contract. ...
Local group of real estate brokers who are members of the State and National Board of REALTORS®. Meets regularly with their membership and helps determine licensing requirements as well as ...
Doing business as, or DBA, means an official moniker for your enterprise or company. Regularly, a DBA is a state certificate serving as a registration name and issued under a ...
Passing of title to property that is in fact not valid. ...
Under current tax law, real estate is depreciated under either the straight-line method or modified accelerated cost recovery system (MACRS) method. See also MACRS. ...
A lien that makes property security for the repayment of debt. Mortgages can finance the acquisition of real estate such as a home. A mortgage has certain benefits compared to other debt ...
Early American style 1 story house with a steep gable roof covered with shingles. The bedrooms are on the first floor, but the attic is often finished and made into additional bedrooms. ...
Have a question or comment?
We're here to help.