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Modified Accelerated Cost Recovery System (MACRS)
Although SLN is the most commonly used depreciation method in the U.S. for purpose of financial reporting, MACRS is the only depreciation method approved by the IRS for computing tax-liability.
Most depreciated property placed in service after the 1986 qualifies for MACRS. There are two variations of MACRS: the General Depreciation System (GDS) and the Alternative Depreciation System (ADS).
Both MACRS-ADS and The MACRS-GDS include a feature we have not used previously: the half year convention. It is assumed that, on average, a property is used for the half of the first year of service. Similarly, it is assumed that is used for half of the last year of service.
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