MACRS vs Straight-Line: Which Depreciation Method Wins?
MACRS (Modified Accelerated Cost Recovery System) is the depreciation method the IRS requires for most business property. For personal property like equipment, vehicles, and office furniture, the default is 200% declining balance — an accelerated method that front-loads bigger deductions into the early years. Straight-line, by contrast, spreads the cost evenly across the recovery period and is the only option allowed for nonresidential real property (39 years) and residential rental property (27.5 years). Most assets also use the half-year convention, which treats the property as placed in service at the midpoint of the year — so your first-year deduction is roughly half of what a full year would give you.
How the Numbers Are Calculated
| Method | Formula | Trait |
|---|---|---|
| Straight-line | Cost ÷ recovery years | Same amount every year |
| MACRS 200% DB | Remaining basis × (2 ÷ recovery years) | Larger deductions up front |
If you want to reduce taxable income sooner, MACRS's accelerated schedule generally wins. If you'd rather have predictable, level deductions for planning purposes, straight-line is the simpler choice — and for real property, it's the only one the IRS allows. This tool applies a simplified 2÷recovery-years formula and the half-year convention as an estimate; actual MACRS tables published by the IRS may differ slightly by asset class.
Frequently Asked Questions
MACRS (Modified Accelerated Cost Recovery System) is the standard depreciation method under U.S. tax law. Most personal business property uses 200% declining balance, which front-loads deductions, while nonresidential real property must use straight-line over 39 years.
For most property, the IRS treats an asset as if it were placed in service at the midpoint of the year, regardless of the actual purchase date. That's why the first-year deduction is roughly half of a full year's depreciation.
Yes, you can elect straight-line depreciation for personal property under MACRS if you prefer steady, predictable deductions over front-loaded ones. Real property (buildings) doesn't have this choice — straight-line is required.
※ This is a simplified reference estimate, not an official IRS MACRS table — confirm exact figures with a tax professional.