# MACRS Property Class and Recovery Period Reference for Manufacturers > Source: https://netray.co/tools/macrs-property-class-recovery-period-reference > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Free Tools ## Short answer Searchable table of MACRS recovery periods, depreciation methods and conventions, with typical manufacturing assets for each class. ## Category cost-finance ## Region United States ## Audience - Controller - Fixed asset accountant - Tax manager ## Tool **Kind:** worksheet **Mode:** reference **Columns:** #### Recovery period **Key:** period **Type:** text #### Method (general depreciation system) **Key:** method **Type:** text #### Convention **Key:** convention **Type:** text #### Typical examples **Key:** examples **Type:** text **Rows:** **Period:** 3-year **Method:** 200% declining balance **Convention:** Half-year or mid-quarter **Examples:** Tractor units for over-the-road use, certain manufacturing tools in specific asset classes **Period:** 5-year **Method:** 200% declining balance **Convention:** Half-year or mid-quarter **Examples:** Computers and peripheral equipment, automobiles, light trucks, copiers **Period:** 5-year **Method:** 200% declining balance **Convention:** Half-year or mid-quarter **Examples:** Property used in research and experimentation **Period:** 7-year **Method:** 200% declining balance **Convention:** Half-year or mid-quarter **Examples:** Office furniture and fixtures, most production machinery and equipment not assigned another class **Period:** 7-year **Method:** 200% declining balance **Convention:** Half-year or mid-quarter **Examples:** Railroad track, agricultural machinery and equipment **Period:** 10-year **Method:** 200% declining balance **Convention:** Half-year or mid-quarter **Examples:** Vessels, barges, tugs, single purpose agricultural structures **Period:** 15-year **Method:** 150% declining balance **Convention:** Half-year or mid-quarter **Examples:** Land improvements such as fences, roads, sidewalks, parking lots, landscaping **Period:** 15-year **Method:** Straight line **Convention:** Half-year or mid-quarter **Examples:** Qualified improvement property, qualified leasehold and restaurant improvements (current law) **Period:** 20-year **Method:** 150% declining balance **Convention:** Half-year or mid-quarter **Examples:** General purpose farm buildings, municipal sewers **Period:** 25-year **Method:** Straight line **Convention:** Mid-month **Examples:** Water utility property **Period:** 27.5-year **Method:** Straight line **Convention:** Mid-month **Examples:** Residential rental property **Period:** 39-year **Method:** Straight line **Convention:** Mid-month **Examples:** Nonresidential real property such as factories, warehouses and office buildings (building shell) **Period:** Land **Method:** Not depreciable **Convention:** Not applicable **Examples:** Land itself, including the cost of clearing and grading to acquire it **Period:** Alternative system **Method:** Straight line over class life **Convention:** As applicable **Examples:** Required for tax-exempt use property, foreign use property and certain listed property **Notes:** Recovery periods follow IRS Publication 946 and its asset class tables. A building's cost segregation study can move some components into shorter classes. Special depreciation rules (Section 179 and bonus depreciation) change the timing of the deduction but not the class. Confirm the asset class for your NAICS activity before assigning. ## Content **Intro:** Assigning the right MACRS class decides how fast a machine or building is written off for tax. This reference lists each recovery period with the method, convention and the manufacturing assets that usually fall into it. **Sections:** #### How to use the table **Body:** Find the asset in the examples column, then read across for the recovery period, method and convention. Your fixed asset register should carry a separate tax book with the class code, placed in service date and convention, so the depreciation run matches the return. If your asset does not appear, check the asset class tables in Publication 946, which classify by business activity as well as asset type. #### Conventions that change the first year **Body:** The half-year convention treats all assets as placed in service at mid-year. If more than 40 percent of the year's depreciable basis (excluding real property) is placed in service in the last quarter, the mid-quarter convention applies and the first year deduction falls. Real property uses the mid-month convention instead. **Bullets:** - Half-year: default for personal property - Mid-quarter: triggered by the 40 percent last-quarter test - Mid-month: nonresidential and residential real property - Section 179 amounts are removed before running the 40 percent test #### Common mistakes **Body:** Plants often depreciate everything on book life and never maintain a tax book, which makes bonus depreciation and Section 179 elections hard to audit later. Another error is putting the whole building into 39-year property when parts qualify as land improvements or qualified improvement property. A cost segregation study, done by qualified engineers, is the usual way to support that split. **Cta:** If your ERP asset module only carries one depreciation book, Netray can help design a tax book and reporting that ties to the return. **Faq:** #### What MACRS class is most manufacturing machinery? **Answer:** Most production machinery falls in 7-year property unless its asset class assigns another period. Computers and research property are generally 5-year. Confirm the specific asset class in IRS Publication 946 for your industry, because the activity-based tables can override the general guess. #### Are factory buildings 39-year property? **Answer:** The building shell of a nonresidential factory is 39-year straight line property. Components that are really land improvements or qualified improvement property can be shorter, and a cost segregation study can support that. Land is never depreciable. #### Does bonus depreciation change the class? **Answer:** No. Bonus depreciation and Section 179 change how much you deduct in the first year, not the MACRS recovery period. Any remaining basis is still depreciated over the original class. #### Which convention applies to equipment bought in December? **Answer:** If December purchases push more than 40 percent of the year's depreciable personal property basis into the last quarter, the mid-quarter convention applies to all that year's additions. That gives a much smaller first year deduction for the December items. ## Search terms macrs property classes, macrs recovery period table, 7 year property machinery macrs, macrs 5 year property list, macrs depreciation methods conventions, fixed asset tax class manufacturing, irs publication 946 recovery periods, qualified improvement property 15 year --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json