IRS Asset Life Table: Class Lives, Recovery Periods, and Conventions

The IRS asset life table is the government’s master list of depreciation recovery periods, published in Revenue Procedure 87-56 and reproduced as Tables B-1 and B-2 in IRS Publication 946.¹ For each type of business property, it gives you a class life and the number of years over which you write the cost off under the Modified Accelerated Cost Recovery System (MACRS). Picking the right row is the first real step in every depreciation calculation, because the recovery period you land on drives your annual deduction on Form 4562.

Where to Find the Table

Two official sources work together. Publication 946, “How to Depreciate Property,” explains the rules, conventions, and methods.² The actual table sits inside Revenue Procedure 87-56, which Publication 946 reprints as Tables B-1 and B-2.¹ Tax professionals treat Rev. Proc. 87-56 as the definitive source when classifying an asset.

How the Table Is Organized

The table has two sections. Table B-1 covers assets used across all industries, such as office furniture, computers, and vehicles. Table B-2 covers assets tied to a specific industry, such as manufacturing equipment or agricultural machinery. If an asset appears in both a general class and an industry class, the industry-specific class controls.¹

Every row gives you four pieces of information:

The asset class number. General classes run from 00.11 to 00.4; industry classes run from 20.0 to 80.0.
A plain-language description of the property that belongs in that class.
The class life, or ADR midpoint. This is the theoretical useful life in years, carried over from the older Asset Depreciation Range system. You rarely use it directly on a return, but it determines which GDS recovery period applies.
The GDS and ADS recovery periods. GDS is the standard tax life; ADS is the longer alternative.

Most businesses use the GDS column. GDS pairs with an accelerated method that front-loads deductions into the early years. ADS is longer and always uses straight-line depreciation, spreading the cost evenly. Unless a specific rule forces you into ADS, the GDS column is the one that matters.

Turning a Class Life Into a Recovery Period

You usually don’t have to do this yourself, because the table lists the GDS period directly. But the underlying mapping is useful when a class life is listed and the GDS period looks ambiguous:¹

3-year property: class life of 4 years or less
5-year property: class life of more than 4 years but less than 10
7-year property: class life of 10 years or more but less than 16
10-year property: class life of 16 years or more but less than 20
15-year property: class life of 20 years or more but less than 25
20-year property: class life of 25 years or more, excluding real property

An asset with a class life of 12 years falls into the 7-year GDS recovery period, not 12. The gap between the theoretical life and the tax life is intentional; MACRS was designed to let businesses recover costs faster than the asset wears out.

Common Recovery Periods at a Glance

These are the entries most small businesses actually need:

Computers and peripherals (Class 00.12): 5-year GDS
Cars and light trucks (Class 00.22): 5-year GDS
Office furniture and fixtures (Class 00.11): 7-year GDS
Heavy-duty trucks, 13,000 lbs. or more (Class 00.242): 5-year GDS
New farm machinery and equipment: 5-year GDS³
Used farm machinery and equipment: 7-year GDS

General-purpose business equipment that doesn’t fit a more specific class usually lands in the 7-year catch-all. When you’re unsure, look at Table B-2’s industry entry first; if nothing there matches, fall back to the general classes in B-1.

When ADS Applies Instead of GDS

GDS is the default. ADS becomes mandatory in a handful of situations:¹

Property used mainly outside the United States
Property financed with tax-exempt bonds
Listed property (passenger vehicles and certain other assets prone to personal use) used 50% or less for business

ADS uses straight-line depreciation over a longer recovery period. A piece of equipment with a 5-year GDS life might carry a 9- or 12-year ADS life. The practical result is a smaller deduction stretched across more years. You can elect ADS voluntarily, but the election locks in for every asset in the same property class placed in service that year, with a narrow exception that lets residential rental and nonresidential real property be elected building by building.¹ Once elected for a class in a given year, you can’t switch back.

Assets With Fixed Statutory Recovery Periods

Several property types skip the asset class table entirely. Congress wrote their recovery periods directly into the tax code.

Real Property

Residential rental property (apartment buildings, rental houses, and similar housing) depreciates over 27.5 years using straight-line. Nonresidential real property (office buildings, retail space, warehouses) gets a 39-year straight-line recovery period.⁴ Both use the mid-month convention.

Land Improvements and Qualified Improvement Property

Sidewalks, parking lots, fences, and landscaping are generally 15-year property. Qualified Improvement Property, meaning interior, non-structural improvements to nonresidential buildings, also gets a 15-year GDS recovery period with a 20-year ADS life, regardless of the 39-year life on the building itself.⁴ Tenants making leasehold improvements depreciate them over 15 years even if the lease runs shorter or longer.

Passenger Automobiles

Cars and light trucks are 5-year property, but Section 280F caps the annual deduction. For vehicles placed in service in 2026, the inflation-adjusted limits are:⁵

With bonus depreciation: $20,300 in year 1, $19,800 in year 2, $11,900 in year 3, $7,160 each year after
Without bonus depreciation: $12,300 in year 1, $19,800 in year 2, $11,900 in year 3, $7,160 each year after

If the vehicle costs more than the caps let you deduct over five years, you keep claiming $7,160 per year until the cost is fully recovered. Vehicles over 6,000 pounds gross vehicle weight are exempt, which is why heavy SUVs and trucks receive more favorable treatment.

Off-the-Shelf Computer Software

Commercially available software that isn’t customized for your business depreciates over 36 months, straight-line, under Section 167(f)(1). It sits outside MACRS. Custom-developed software typically falls into a regular 3-year or 5-year MACRS class or may qualify for immediate expensing.

First-Year Timing: The Conventions

Once you have the recovery period, the convention decides how much depreciation you can claim in the year you place the asset in service and the year you dispose of it.

Half-Year

The default for most personal property. Whether you buy the asset in January or November, it’s treated as placed in service at the midpoint of the year, giving you half a year in the first year and half a year in the final year of the recovery period.¹

Mid-Quarter

If more than 40% of your total depreciable property for the year, measured by cost basis, was placed in service in the last three months, the IRS moves you off the half-year rule and onto mid-quarter. Each asset is then treated as placed in service at the midpoint of the quarter it actually went into use.¹ Fourth-quarter purchases get about a month and a half of depreciation, which cuts the first-year deduction sharply.

Mid-Month

Real property, residential and nonresidential, always uses mid-month. A rental property placed in service on March 3 is treated as placed in service on March 15, giving 9.5 months of depreciation in year one.¹

Before You Use the Table: Bonus Depreciation and Section 179

Two provisions can shortcut the recovery period the table assigns, so check them first.

The One, Big, Beautiful Bill Act, signed on July 4, 2025, restored a permanent 100% first-year depreciation deduction for qualified property acquired after January 19, 2025.⁶ The full cost of eligible new and used equipment, machinery, vehicles, and other qualifying tangible property can be deducted in the year it’s placed in service. You still need the asset class table to confirm the property qualifies and to identify the correct recovery period for Form 4562. Taxpayers who placed qualifying property in service during the first tax year ending after January 19, 2025, may elect a reduced 40% deduction (or 60% for certain long-production-period property and aircraft) instead of the full 100%.⁷

Section 179 lets you deduct the full purchase price of qualifying equipment and software in the year you buy it, up to an annual cap. For 2025, the maximum is $2,500,000, phasing out dollar-for-dollar once qualifying property placed in service exceeds $4,000,000. The Section 179 deduction can’t exceed your taxable business income for the year; any excess carries forward.¹ Section 179 and bonus depreciation can be layered. Both apply before regular MACRS, which means many assets never reach the multi-year tables at all.

Fixing a Wrong Recovery Period

Using the wrong recovery period isn’t a rounding issue. A substantial understatement of income tax carries an accuracy-related penalty of 20% of the underpayment, and 40% for a gross valuation misstatement.⁸

The fix is Form 3115, Application for Change in Accounting Method, not an amended return. For switching from an incorrect depreciation method to the correct one, the automatic change procedure (designated change number 7) generally requires no user fee or prior IRS approval. The form produces a Section 481(a) adjustment that captures the cumulative difference between what you deducted and what you should have deducted. If you already disposed of the property, a separate change number (DCN 107) covers that situation.⁹ Attaching Form 3115 to a timely filed return is far better than having the IRS find the error in an audit.

1
Internal Revenue Service. Publication 946 (2025), How To Depreciate Property
2
Internal Revenue Service. About Publication 946, How to Depreciate Property
3
Internal Revenue Service. Farmer’s Tax Guide
4
Office of the Law Revision Counsel. 26 USC 168 – Accelerated Cost Recovery System
5
Internal Revenue Service. Rev. Proc. 2026-15
6
Internal Revenue Service. One, Big, Beautiful Bill Provisions
7
Internal Revenue Service. Notice 2026-11 – Interim Guidance on Additional First Year Depreciation Deduction
8
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments
9
Internal Revenue Service. Instructions for Form 3115