Equipment Depreciation Schedules: Choosing a MACRS Recovery Period
Updated November 8, 2026.
Equipment does not have one universal depreciation life. Start with the asset's function and applicable classification, then determine the depreciation system, method and convention. Computers and office furniture commonly have different recovery periods, and industry-specific classifications can change the answer.
Common equipment categories
| Asset | Common recovery period | Check before using it |
|---|---|---|
| Computers and peripheral equipment | 5 years | Separate software and other bundled items where required |
| Office furniture and fixtures | 7 years | Confirm this is furniture, not a building component |
| Over-the-road tractor units | 3 years | Do not treat a tractor unit and trailer as the same asset |
| Other machinery | Varies | Check both the asset category and the business activity |
| Building and site work | Varies | Separate land, structure, eligible improvements and equipment |
The IRS asset-class tables include both general categories and activity-specific classes. A convenient description such as “manufacturing equipment” or “farm equipment” does not settle every asset's recovery period. Keep the classification and supporting source in the depreciation file.
Recovery period, method and convention are different
The recovery period describes the tax recovery span. The method determines the pattern of deductions, and the convention controls partial-year treatment. A seven-year asset can generate deductions across eight tax years under a half-year convention; the table's final partial year does not turn it into eight-year property.
The mid-quarter test can replace half-year treatment when the applicable late-year basis threshold is met. Its computation has exclusions and adjustments; do not test every capital expenditure as though land, buildings and equipment were one pool. For the percentage tables and a worked calculation, use the MACRS schedule guide.
GDS versus ADS
The General Depreciation System is common, but the Alternative Depreciation System applies when required or validly elected. ADS uses its own recovery periods and methods. A Section 163(j) election affects specified property classes rather than automatically putting every asset owned by that business into ADS. Confirm the particular asset's treatment.
How bonus depreciation and Section 179 fit
Classification still matters when accelerated deductions are available. Determine ownership, eligible basis, business use, acquisition and service dates, and applicable elections before calculating bonus or Section 179. A favorable recovery period does not override another exclusion.
Section 179 has its own income and investment limitations. Bonus eligibility and elections differ. State conformity can require a separate schedule. Read the 2026 Section 179 guide before treating a purchase order or financing payment as an immediate deduction.
Build an asset-level record
- Describe the asset, serial number and business use.
- Keep the invoice and support for allocable delivery, installation and other basis items.
- Record when it was ready and available for use, not just ordered or paid for.
- Document tax ownership where financed or leased.
- Save the classification source, system, method, convention and elections.
- Track improvements, transfers, dispositions and federal/state differences.
Existing schedules need a correction analysis
If an earlier return used the wrong life, determine whether the issue is an accounting method, isolated error or election. An eligible Form 3115 change may involve a Section 481(a) adjustment; an amendment or another procedure may be appropriate instead. Do not simply overwrite the old schedule without reconciling prior deductions. See Form 3115 and missed depreciation.
A sale also requires the accumulated depreciation and adjusted basis. Recapture depends on the asset and gain calculation; it is not automatically every dollar received. AE can review a proposed equipment purchase or an existing asset schedule at a planning call.
Frequently Asked Questions
Is all equipment depreciated over five years?
No. The recovery period depends on the asset and applicable activity classification. Office furniture commonly uses seven-year GDS treatment, while computers commonly use five years.
Does 100% bonus make classification unnecessary?
No. Classification affects eligibility, elections, regular depreciation, state treatment and later basis records.
Is the purchase date the placed-in-service date?
Not necessarily. The asset generally must be ready and available for its intended business use.
Can I change a prior depreciation life myself?
First determine the correction procedure. A method change, error and election can require different filings and adjustments.
Sources and update notes
Source references and the changes described in this guide were checked November 8, 2026. Published by AE Tax Advisors; see our editorial policy. Examples are illustrative and require review of your records before filing.