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
Method of construction where part of the structure is supported by a cantilever beam or truss. ...
(1) Revising the selling price of real property to reflect what it would be worth if typical financing was available. (2) How much real property would be sold for if all cash was involved. ...
A certificate of ownership in a real estate company. Pledged assets for a borrowing. An example is an office building serving as collateral for the mortgage. Way of protecting property ...
Title deficiency that prevents a seller from successfully transferring property to a buyer. A title company may discover a title defect ( due to encumbrances against the property or failure ...
Part of something such as the units making up a heating or air conditioning system in a building. ...
How much water may be retained in a unit, such as an expansion tank in a home. ...
A clearly stated notice that an owner or operator will not assume responsibility for an inherent risk. For example, at a parking garage, a large notice of nonresponsability clearly states ...
series of rows. townships moving as a row from east to west. It covers a 6-miles area in width. The term is employed under the rectangular survey method. ...
individual who purchases property for another for the purpose of not identifying to the seller and other interested parties the real identity of the true acquirer. The individual who makes ...
Have a question or comment?
We're here to help.