Construction may be depreciated under methods which produce faster depreciation than economic depreciation. The precise rules have been changed repeatedly in recent years by revisions of the federal tax code. For structures (other than housing) placed in service after May 13, 1993, federal law requires straight-line depreciation over a 39 year life. The excess of accelerated depreciation over straight-line depreciation is a tax expenditure. For a more detailed description of accelerated depreciation, see the description for item 2.301.
The TCJA provides that an electing real property trade or business must use the alternative depreciation system for its residential or nonresidential real property. The alternative depreciation system period for nonresidential real property remains 40 years, while the period for residential real property is now 30 years.
Origin: IRC § 168
Corporate Excise Tax
Accelerated Deductions from Gross Income
2.307
Modified Accelerated Depreciation on Buildings (other than Rental Housing)
Construction may be depreciated under methods which produce faster depreciation than economic depreciation. The precise rules have been changed repeatedly in recent years by revisions of the federal tax code. For structures (other than housing) placed in service after May 13, 1993, federal law requires straight-line depreciation over a 39 year life. The excess of accelerated depreciation over straight-line depreciation is a tax expenditure. For a more detailed description of accelerated depreciation, see the description for item <a href="/tax-expenditure-budget/corporate-excise-tax/accelerated-deductions-from-gross-income/2-301">2.301</a>.<BR><BR>The TCJA provides that an electing real property trade or business must use the alternative depreciation system for its residential or nonresidential real property. The alternative depreciation system period for nonresidential real property remains 40 years, while the period for residential real property is now 30 years.
<a href="http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000168----000-.html" target="_blank">IRC § 168</a>
2.4
1.8
1.6
1.6
1.6
