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2011 1040 Ez Form

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2011 1040 Ez Form

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Contact My Local Office in Michigan

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City Street Address Days/Hours of Service Telephone* 
Detroit  500 Woodward Ave.
Detroit, MI 48226 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(313) 628-3722 
Flint  917 N. Saginaw Street
Flint, MI 48503 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**


Services Provided

(810) 342-6190 
Grand Rapids  3251 N. Evergreen Dr. N.E.
Grand Rapids, MI 49525 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
 

Services Provided

(616) 365-4700 
Marquette  1055 W. Baraga Ave.
Marquette, MI 49855 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(906) 228-7845 
Saginaw  4901 Towne Centre
Saginaw, MI 48604 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(989) 797-8560 
Traverse City  2040 N. US 31 South
Traverse City, MI 49685 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)
 

    Services Provided

(231) 932-2192 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call 313-628-3670 in Detroit or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS.

For further information, see Tax Topic 104

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
477 Michigan Ave.
Stop 45, Room 2401
Detroit, MI 48226

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The 2011 1040 Ez Form

2011 1040 ez form Accelerated Cost Recovery System (ACRS) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: ACRS Defined What Can and Cannot Be Depreciated Under ACRSRecovery Property Nonrecovery Property How To Figure the DeductionUnadjusted Basis Classes of Recovery Property Recovery Periods Alternate ACRS Method (Modified Straight Line Method) ACRS Deduction in Short Tax Year DispositionsEarly dispositions of ACRS property other than 15-, 18-, or 19-year real property. 2011 1040 ez form Dispositions — mass asset accounts. 2011 1040 ez form Early dispositions — 15-year real property. 2011 1040 ez form Early dispositions — 18- and 19-year real property. 2011 1040 ez form Depreciation Recapture Topics - This chapter discusses: The definition of ACRS What can and cannot be depreciated under ACRS How to figure the deduction Dispositions Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 551 Basis of Assets 583 Starting a Business and Keeping Records Form (and Instructions) 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization The Accelerated Cost Recovery System (ACRS) applies to property first used before 1987. 2011 1040 ez form It is the name given to tax rules for getting back (recovering) through depreciation deductions the cost of property used in a trade or business or to produce income. 2011 1040 ez form These rules are mandatory and generally apply to tangible property placed in service after 1980 and before 1987. 2011 1040 ez form If you placed property in service during this period, you must continue to figure your depreciation under ACRS. 2011 1040 ez form If you used listed property placed in service after June 18, 1984, less than 50% for business in 1995, see Predominant Use Test in chapter 3. 2011 1040 ez form Listed property includes cars, other means of transportation, and certain computers. 2011 1040 ez form Any additions or improvements placed in service after 1986, including any components of a building (such as plumbing, wiring, storm windows, etc. 2011 1040 ez form ), are depreciated using MACRS, discussed in chapter 3 of Publication 946. 2011 1040 ez form It does not matter that the underlying property is depreciated under ACRS or one of the other methods. 2011 1040 ez form ACRS Defined ACRS consists of accelerated depreciation methods and an alternate ACRS method that could have been elected. 2011 1040 ez form The alternate ACRS method used a recovery percentage based on a modified straight line method. 2011 1040 ez form The law prescribes fixed percentages to be uses for each class of property. 2011 1040 ez form Property depreciable under ACRS is called recovery property. 2011 1040 ez form The recovery class of property determines the recovery period. 2011 1040 ez form Generally, the class life of property places it in a 3-year, 5-year, 10-year, 15-year, 18-year, or 19-year recovery class. 2011 1040 ez form Under ACRS, the prescribed percentages are used to recover the unadjusted basis of recovery property. 2011 1040 ez form To figure a depreciation deduction, you multiply the prescribed percentage for the recovery class by the unadjusted basis of the recovery property. 2011 1040 ez form You must continue to figure your depreciation under ACRS for property placed in service after 1980 and before 1987. 2011 1040 ez form For property you placed in service after 1986, you must use MACRS, discussed in chapter 3 of Publication 946. 2011 1040 ez form What Can and Cannot Be Depreciated Under ACRS ACRS applies to most depreciable tangible property placed in service after 1980 and before 1987. 2011 1040 ez form It includes new or used and real or personal property. 2011 1040 ez form The property must be for use in a trade or business or for the production of income. 2011 1040 ez form Property you acquired before 1981 or after 1986 is not ACRS recovery property. 2011 1040 ez form For information on depreciating property acquired before 1981, see chapter 2. 2011 1040 ez form For information on depreciating property acquired after 1986, see chapter 3 of Publication 946. 2011 1040 ez form Recovery Property Recovery property under ACRS is tangible depreciable property placed in service after 1980 and before 1987. 2011 1040 ez form It generally includes new or used property that you acquired after 1980 and before 1987 for use in your trade or business or for the production of income. 2011 1040 ez form Nonrecovery Property You cannot use ACRS for property you placed in service before 1981 or after 1986. 2011 1040 ez form Nonrecovery property also includes: Intangible property, Property you elected to exclude from ACRS that is properly depreciated under a method of depreciation that is not based on a term of years, Certain public utility property, and Certain property acquired and excluded from ACRS because of the antichurning rules. 2011 1040 ez form Intangible property. 2011 1040 ez form   Intangible property is not depreciated under ACRS. 2011 1040 ez form Property depreciated under methods not expressed in a term of years. 2011 1040 ez form   Certain property depreciated under a method not expressed in a term of years is not depreciated under ACRS. 2011 1040 ez form This included any property: If you made an irrevocable election to exclude such property, and In the first year that you could have claimed depreciation, you properly used the unit-of-production method or any method of depreciation not expressed in a term of years (not including the retirement-replacement-betterment method). 2011 1040 ez form Public utility property. 2011 1040 ez form   Public utility property for which the taxpayer does not use a normalization method of accounting is excluded from ACRS and is subject to depreciation under a special rule. 2011 1040 ez form Additions or improvements to ACRS property after 1986. 2011 1040 ez form   Any additions or improvements placed in service after 1986, including any components of a building (plumbing, wiring, storm windows, etc. 2011 1040 ez form ) are depreciated using MACRS, discussed in chapter 3 of Publication 946. 2011 1040 ez form It does not matter that the underlying property is depreciated under ACRS or one of the other methods. 2011 1040 ez form How To Figure the Deduction After you determine that your property can be depreciated under ACRS, you are ready to figure your deduction. 2011 1040 ez form Because the conventions are built into the percentage table rates, you only need to know the following: The unadjusted basis of your recovery property, The classes of recovery property, The recovery periods, and Whether to use the prescribed percentages based on accelerated methods or percentages based on using the alternate ACRS method. 2011 1040 ez form Unadjusted Basis To figure your ACRS deduction, you multiply the unadjusted basis in your recovery property by its applicable percentage for the year. 2011 1040 ez form Unadjusted basis is the same amount you would use to figure gain on a sale, but it is figured without taking into account any depreciation taken in earlier years. 2011 1040 ez form However, reduce your original basis by the amount of amortization taken on the property and by any section 179 deduction claimed as discussed in chapter 2 of Publication 946. 2011 1040 ez form If you buy property, your unadjusted basis is usually its cost minus any amortized amount and minus any section 179 deduction elected. 2011 1040 ez form If you acquire property in some other way, such as by inheriting it, getting it as a gift, or building it yourself, you figure your unadjusted basis under other rules. 2011 1040 ez form See Publication 551. 2011 1040 ez form Classes of Recovery Property All recovery property under ACRS is in one of the following classes. 2011 1040 ez form The class for your property was determined when you began to depreciate it. 2011 1040 ez form 3-Year Property 3-year property includes automobiles, light-duty trucks (actual unloaded weight less than 13,000 pounds), and tractor units for use over-the-road. 2011 1040 ez form Race horses over 2 years old when placed in service are 3-year property. 2011 1040 ez form Any other horses over 12 years old when you placed them in service are also included in the 3-year property class. 2011 1040 ez form The ACRS percentages for 3-year recovery property are: Recovery Period Percentage 1st year 25% 2nd year 38% 3rd year 37% If you used the percentages above to depreciate your 3-year recovery property, your property, except for certain passenger automobiles, is fully depreciated. 2011 1040 ez form You cannot claim depreciation for this property after 1988. 2011 1040 ez form 5-Year Property 5-year property includes computers, copiers, and equipment, such as office furniture and fixtures. 2011 1040 ez form It also includes single purpose agricultural or horticultural structures and petroleum storage facilities (other than buildings and their structural components). 2011 1040 ez form The ACRS percentages for 5-year recovery property are: Recovery period Percentage 1st year 15% 2nd year 22% 3rd through 5th year 21% If you used the percentages above to depreciate your 5-year recovery property, it is fully depreciated. 2011 1040 ez form You cannot claim depreciation for this property after 1990. 2011 1040 ez form 10-Year Property 10-year property includes certain real property such as theme-park structures and certain public utility property. 2011 1040 ez form Manufactured homes (including mobile homes) and railroad tank cars are also 10-year property. 2011 1040 ez form You do not treat a building, and its structural components, as 10-year property by reason of a change in use after you placed the property in service. 2011 1040 ez form For example, a building (15-year real property) that was placed in service in 1981 and was converted to a theme-park structure in 1986 remains 15-year real property. 2011 1040 ez form The ACRS percentages for 10-year recovery property are: Recovery Period Percentage 1st year 8% 2nd year 14% 3rd year 12% 4th through 6th year 10% 7th through 10th year 9% If you used the percentages above, you cannot claim depreciation for this property after 1995. 2011 1040 ez form Example. 2011 1040 ez form On April 21, 1986, you bought and placed in service a new mobile home for $26,000 to be used as rental property. 2011 1040 ez form You paid $10,000 cash and signed a note for $16,000 giving you an unadjusted basis of $26,000. 2011 1040 ez form On June 8, 1986, you bought and placed in service a used mobile home for use as rental property at a total cost of $11,500. 2011 1040 ez form The total unadjusted basis of your 10-year recovery property placed in service in 1986 was $37,500 ($26,000 + $11,500). 2011 1040 ez form Your ACRS deduction was $3,000 (8% × $37,500). 2011 1040 ez form In 1987, your ACRS deduction was $5,250 (14% × $37,500). 2011 1040 ez form In 1988, your ACRS deduction was $4,500 (12% × $37,500). 2011 1040 ez form In 1989, 1990, and 1991, your ACRS deduction was $3,750 (10% × $37,500). 2011 1040 ez form In 1992, 1993, 1994, and 1995 your deduction for each year is $3,375 (9% × $37,500). 2011 1040 ez form 15-Year Real Property 15-year real property is real property that is recovery property placed in service before March 16, 1984. 2011 1040 ez form It includes all real property, such as buildings, other than that designated as 5-year or 10-year property. 2011 1040 ez form Unlike the 3-, 5-, or 10-year classes of property, the percentages for 15-year real property depend on when you placed the property in service during your tax year. 2011 1040 ez form You could group 15-year real property by month and year placed in service. 2011 1040 ez form In Table 1, at the end of this publication in the Appendix, find the month in your tax year that you placed the property in service in your trade or business or for the production of income. 2011 1040 ez form You use the percentages listed under that month for each year of the recovery period to determine your depreciation deduction each year. 2011 1040 ez form Example. 2011 1040 ez form On March 5, 1984, you placed an apartment building in service in your business. 2011 1040 ez form It is 15-year real property. 2011 1040 ez form After subtracting the value of the land, your unadjusted basis in the building is $250,000. 2011 1040 ez form You use the calendar year as your tax year. 2011 1040 ez form March is the third month of your tax year. 2011 1040 ez form Your ACRS deduction for 1984 was $25,000 (10% × $250,000). 2011 1040 ez form For 1985, the percentage for the third month of the second year of the recovery period is 11%. 2011 1040 ez form Your deduction was $27,500 (11% × $250,000). 2011 1040 ez form For the third, fourth, and fifth years of the recovery period (1986, 1987, and 1988), the percentages are 9%, 8%, and 7%. 2011 1040 ez form For 1989 through 1992, the percentage for the third month is 6%. 2011 1040 ez form Your deduction each year is $15,000 (6% × $250,000). 2011 1040 ez form For 1993, 1994, and 1995, the percentage for the third month is 5%. 2011 1040 ez form Your depreciation deduction is $12,500 (5% × $250,000) for 1993, 1994, and 1995. 2011 1040 ez form Low-Income Housing Low-income housing that was assigned a 15-year recovery period under ACRS includes the following types of property: Federally assisted housing projects where the mortgage is insured under section 221(d)(3) or 236 of the National Housing Act, or housing financed or assisted by direct loan or tax abatement under similar provisions of state or local laws. 2011 1040 ez form Low-income rental housing for which a depreciation deduction for rehabilitation expenditures is allowed. 2011 1040 ez form Low-income rental housing held for occupancy by families or individuals eligible to receive subsidies under section 8 of the United States Housing Act of 1937, as amended, or under the provisions of state or local laws that authorize similar subsidies for low-income families. 2011 1040 ez form Housing financed or assisted by direct loan or insured under Title V of the Housing Act of 1949. 2011 1040 ez form The ACRS percentages for low-income housing real property, like the regular 15-year real property percentages, depend on when you placed the property in service. 2011 1040 ez form Find the month in your tax year in Table 2 or 3 at the end of this publication in the Appendix that you first placed the property in service as rental housing. 2011 1040 ez form Use the percentages listed under that month for each year of the recovery period. 2011 1040 ez form Table 2 shows percentages for low-income housing placed in service before May 9, 1985. 2011 1040 ez form Table 3 shows percentages for low-income housing placed in service after May 8, 1985, and before 1987. 2011 1040 ez form Example. 2011 1040 ez form In May 1986, you acquired and placed in service a house that qualified as low-income rental housing under item 3) of the above listing. 2011 1040 ez form You use the calendar year as your tax year. 2011 1040 ez form You use Table C–3 because the property was placed in service after May 8, 1985. 2011 1040 ez form Your unadjusted basis for the property, not including the land, was $59,000. 2011 1040 ez form Your deduction for 1986 through 2001 is shown in the following table. 2011 1040 ez form Year Rate Deduction 1986 8. 2011 1040 ez form 9% $5,251 1987 12. 2011 1040 ez form 1% 7,139 1988 10. 2011 1040 ez form 5% 6,195 1989 9. 2011 1040 ez form 1% 5,369 1990 7. 2011 1040 ez form 9% 4,661 1991 6. 2011 1040 ez form 9% 4,071 1992 5. 2011 1040 ez form 9% 3,481 1993 5. 2011 1040 ez form 2% 3,068 1994 4. 2011 1040 ez form 6% 2,714 1995 4. 2011 1040 ez form 6% 2,714 1996 4. 2011 1040 ez form 6% 2,714 1997 4. 2011 1040 ez form 6% 2,714 1998 4. 2011 1040 ez form 6% 2,714 1999 4. 2011 1040 ez form 5% 2,655 2000 4. 2011 1040 ez form 5% 2,655 2001 1. 2011 1040 ez form 5% 885 18-Year Real Property 18-year real property is real property that is recovery property placed in service after March 15, 1984, and before May 9, 1985. 2011 1040 ez form It includes real property, such as buildings, other than that designated as 5-year, 10-year, 15-year real property, or low-income housing. 2011 1040 ez form The ACRS percentages for 18-year real property depend on when you placed the property in service in your trade or business or for the production of income during your tax year. 2011 1040 ez form There are also tables for 18-year real property in the Appendix. 2011 1040 ez form Table 4 shows the percentages for 18-year real property you placed in service after June 22, 1984, and before May 9, 1985. 2011 1040 ez form Table 5 is for 18-year real property placed in service after March 15, 1984, and before June 23, 1984. 2011 1040 ez form Find the month in your tax year that you placed the property in service in a trade or business or for the production of income. 2011 1040 ez form Use the percentages listed under that month for each year of the recovery period. 2011 1040 ez form Example. 2011 1040 ez form On April 28, 1985, you bought and placed in service a rental house. 2011 1040 ez form The house, not including the land, cost $95,000. 2011 1040 ez form This is your unadjusted basis for the house. 2011 1040 ez form You use the calendar year as your tax year. 2011 1040 ez form Because the house was placed in service after June 22, 1984, and before May 9, 1985, it is 18-year real property. 2011 1040 ez form You use Table 4 to figure your deduction for the house. 2011 1040 ez form April is the fourth month of your tax year. 2011 1040 ez form Your deduction for 1985 through 2003 is shown in the following table. 2011 1040 ez form Year Rate Deduction 1985 7. 2011 1040 ez form 0% $6,650 1986 9. 2011 1040 ez form 0% 8,550 1987 8. 2011 1040 ez form 0% 7,600 1988 7. 2011 1040 ez form 0% 6,650 1989 7. 2011 1040 ez form 0% 6,650 1990 6. 2011 1040 ez form 0% 5,700 1991 5. 2011 1040 ez form 0% 4,750 1992 5. 2011 1040 ez form 0% 4,750 1993 5. 2011 1040 ez form 0% 4,750 1994 5. 2011 1040 ez form 0% 4,750 1995 5. 2011 1040 ez form 0% 4,750 1996 5. 2011 1040 ez form 0% 4,750 1997 5. 2011 1040 ez form 0% 4,750 1998 4. 2011 1040 ez form 0% 3,800 1999 4. 2011 1040 ez form 0% 3,800 2000 4. 2011 1040 ez form 0% 3,800 2001 4. 2011 1040 ez form 0% 3,800 2002 4. 2011 1040 ez form 0% 3,800 2003 1. 2011 1040 ez form 0% 950 19-Year Real Property 19-year real property is real property that is recovery property placed in service after May 8, 1985, and before 1987. 2011 1040 ez form It includes all real property, other than that designated as 5-year, 10-year, 15-year, or 18-year real property, or low-income housing. 2011 1040 ez form The ACRS percentages for 19-year real property depend on when you placed the property in service in a trade or business or for the production of income during your tax year. 2011 1040 ez form Table 6 shows the percentages for 19-year real property. 2011 1040 ez form You find the month in your tax year that you placed the property in service. 2011 1040 ez form You use the percentages listed under that month for each year of the recovery period. 2011 1040 ez form Recovery Periods Each item of recovery property is assigned to a class of property. 2011 1040 ez form The classes of recovery property establish the recovery periods over which the unadjusted basis of items in a class is recovered. 2011 1040 ez form The classes of property are: 3-Year property 5-Year property 10-Year property 15-Year real property Low-income housing 18-Year real property 19-Year real property Alternate ACRS Method (Modified Straight Line Method) ACRS provides an alternate ACRS method that could be elected. 2011 1040 ez form This alternate ACRS method uses a recovery percentage based on a modified straight line method. 2011 1040 ez form This alternate ACRS method generally uses percentages other than those from the tables. 2011 1040 ez form If you elected the alternate ACRS method, you determine the recovery period by using the following schedule. 2011 1040 ez form This schedule is for other than 18- and 19-year real property and low-income housing: In the case of: You could have elected a recovery period of: 3-year property 3, 5, or 12 years 5-year property 5, 12, or 25 years 15-year real property 15, 35, or 45 years Percentages. 2011 1040 ez form   The straight-line percentages for the alternate ACRS method are: Recovery Period Percentage 5 years 20. 2011 1040 ez form 00% 10 years 10. 2011 1040 ez form 00% 12 years 8. 2011 1040 ez form 333% 15 years 6. 2011 1040 ez form 667% 25 years 4. 2011 1040 ez form 00% 35 years 2. 2011 1040 ez form 857%   You apply the percentage to the unadjusted basis(defined earlier) of the property to figure your ACRS deduction. 2011 1040 ez form There are tables for 18- and 19-year real property later in this publication in the Appendix. 2011 1040 ez form For 15-year real property, see 15-year real property, later. 2011 1040 ez form 3-, 5-, and 10-year property. 2011 1040 ez form   If you elected to use an alternate recovery percentage, you have to use the same recovery percentage for all property in that class that you placed in service in that tax year. 2011 1040 ez form This applies throughout the recovery period you selected. 2011 1040 ez form Half-year convention. 2011 1040 ez form   If you elected the alternate method, only a half-year of depreciation was deducted for the year you placed the property in service. 2011 1040 ez form This applied regardless of when in the tax year you placed the property in service. 2011 1040 ez form For each of the remaining years in the recovery period, you take a full year's deduction. 2011 1040 ez form If you hold the property for the entire recovery period, a half-year of depreciation is allowable for the year following the end of the recovery period. 2011 1040 ez form Example. 2011 1040 ez form You operate a small upholstery business. 2011 1040 ez form On March 19, 1986, you bought and placed in service a $13,000 light-duty panel truck to be used in your business and a $500 electric saw. 2011 1040 ez form You elected to use the alternate ACRS method. 2011 1040 ez form You did not elect to take a section 179 deduction. 2011 1040 ez form You decided to recover the cost of the truck, which is 3-year recovery property, over 5 years. 2011 1040 ez form The saw is 5-year property, but you decided to recover its cost over 12 years. 2011 1040 ez form For 1986, your ACRS deduction reflected the half-year convention. 2011 1040 ez form In the first year, you deducted half of the amount determined for a full year. 2011 1040 ez form Your ACRS deduction for 1986 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. 2011 1040 ez form 00     Electric saw   12 years straight line = 8. 2011 1040 ez form 333% 8. 2011 1040 ez form 333% ÷ $500 = $41. 2011 1040 ez form 67 Half-year convention -½ of $41. 2011 1040 ez form 67= 20. 2011 1040 ez form 84 Total ACRS deduction for 1986 $1,320. 2011 1040 ez form 84       You take a full year of depreciation for both the truck and the saw for the years 1987 through 1990. 2011 1040 ez form Your ACRS deduction for each of those years is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600     Electric saw     12 years straight line = 8. 2011 1040 ez form 333% 8. 2011 1040 ez form 333% ÷ $500 = $41. 2011 1040 ez form 67 Total annual ACRS deduction for 1987 through 1990 $2,641. 2011 1040 ez form 67       In 1991, you take a half-year of depreciation for the truck and a full year of depreciation for the saw. 2011 1040 ez form Your ACRS deduction for 1991 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. 2011 1040 ez form 00     Electric saw   12 years straight line = 8. 2011 1040 ez form 333% 8. 2011 1040 ez form 333% ÷ $500 = $41. 2011 1040 ez form 67 Total ACRS deduction for 1991 $1,341. 2011 1040 ez form 67       The truck is fully depreciated after 1991. 2011 1040 ez form You take a full year of depreciation for the saw for the years 1992 through 1997. 2011 1040 ez form Your ACRS deduction for each of those years is as follows: Electric saw     12 years straight line = 8. 2011 1040 ez form 333% 8. 2011 1040 ez form 333% ÷ $500 = $41. 2011 1040 ez form 67 Total annual ACRS deduction for 1992 through 1997 $41. 2011 1040 ez form 67       You take a half-year of depreciation for the saw for 1998. 2011 1040 ez form Your ACRS deduction for 1998 is as follows: Electric saw   12 years straight line = 8. 2011 1040 ez form 333% 8. 2011 1040 ez form 333% ÷ $500 = $41. 2011 1040 ez form 67 Half-year convention -½ of $41. 2011 1040 ez form 67= 20. 2011 1040 ez form 84 Total ACRS deduction for 1998 $20. 2011 1040 ez form 84       The saw is fully depreciated after 1998. 2011 1040 ez form 15-year real property. 2011 1040 ez form   Under ACRS, you could also elect to use the alternate ACRS method for 15-year real property. 2011 1040 ez form The alternate ACRS method allows you to depreciate your 15-year real property using the straight line ACRS method over the alternate recovery periods of 15, 35, or 45 years. 2011 1040 ez form If you selected a 15-year recovery period, you use the percentage (6. 2011 1040 ez form 667%) from the schedule above. 2011 1040 ez form You prorate this percentage for the number of months the property was in service in the first year. 2011 1040 ez form If you selected a 35- or 45-year recovery period, you use either Table 11 or 15. 2011 1040 ez form Alternate periods for 18-year real property. 2011 1040 ez form   For 18-year real property, the alternate recovery periods are 18, 35, or 45 years. 2011 1040 ez form The percentages for 18-year real property under the alternate method are in Tables 7, 8, 10, 11, 14, and 15 in the Appendix. 2011 1040 ez form There are two tables for each alternate recovery period. 2011 1040 ez form One table shows the percentage for property placed in service after June 22, 1984. 2011 1040 ez form The other table has the percentages for property placed in service after March 15, 1984, and before June 23, 1984. 2011 1040 ez form Alternate periods for 19-year real property. 2011 1040 ez form   For 19-year real property, the alternate recovery periods are 19, 35, or 45 years. 2011 1040 ez form If you selected a 19-year recovery period, use Table 9 to determine your deduction. 2011 1040 ez form If you select a 35- or 45-year recovery period, use either Table 13 or 14. 2011 1040 ez form Example. 2011 1040 ez form You placed in service an apartment building on August 3, 1986. 2011 1040 ez form The building is 19-year real property. 2011 1040 ez form The sales contract allocated $300,000 to the building and $100,000 to the land. 2011 1040 ez form You use the calendar year as your tax year. 2011 1040 ez form You chose the alternate ACRS method over a recovery period of 35 years. 2011 1040 ez form For 1986, you figure your ACRS deduction usingTable 13. 2011 1040 ez form August is the eighth month of your tax year. 2011 1040 ez form The percentage from Table 13 for the eighth month is 1. 2011 1040 ez form 1%. 2011 1040 ez form Your deduction was $3,300 ($300,000 ÷ 1. 2011 1040 ez form 1%). 2011 1040 ez form The deduction rate from ACRS Table 13 for years 2 through 20 is 2. 2011 1040 ez form 9% so that your deduction in 1987 through 2005 is $8,700 ($300,000 ÷ 2. 2011 1040 ez form 9%). 2011 1040 ez form Alternate periods for low-income housing. 2011 1040 ez form   For low-income housing, the alternate recovery periods are 15, 35, or 45 years. 2011 1040 ez form If you selected a 15-year period for this property, use 6. 2011 1040 ez form 667% as the percentage. 2011 1040 ez form If you selected a 35- or 45-year period, use either Table 11, 12, or 15. 2011 1040 ez form Election. 2011 1040 ez form   You had to make the election to use the alternate ACRS method by the return due date (including extensions) for the tax year you placed the property in service. 2011 1040 ez form Revocation of election. 2011 1040 ez form   Your election to use an alternate ACRS method, once made, can be changed only with the consent of the Commissioner. 2011 1040 ez form The Commissioner grants consent only in extraordinary circumstances. 2011 1040 ez form Any request for a revocation will be considered a request for a ruling. 2011 1040 ez form ACRS Deduction in Short Tax Year For a tax year that is less than 12 months, the ACRS deduction is prorated on a 12-month basis. 2011 1040 ez form Figure the amount of the ACRS deduction for a short tax year as follows: First, you figure the ACRS deduction for a full year. 2011 1040 ez form You figure this by multiplying the unadjusted basis by the recovery percentage. 2011 1040 ez form You then multiply the ACRS deduction determined for a full tax year by a fraction. 2011 1040 ez form The numerator (top number) of the fraction is the number of months in the short tax year and the denominator (bottom number) is 12. 2011 1040 ez form For example, a corporation placed in service in June 1986 an item of 3-year property with an unadjusted basis of $10,000. 2011 1040 ez form The corporation files a tax return, because of a change in its accounting period, for the 6-month short tax year ending June 30, 1986. 2011 1040 ez form The full year's ACRS deduction for this item is $2,500 ($10,000 ÷ 25%), the first year percentage from the 3-year table. 2011 1040 ez form The ACRS deduction for the short tax year is $1,250 ($2,500 ÷ 6/12). 2011 1040 ez form You use the full ACRS percentages during the remaining years of the recovery period. 2011 1040 ez form For the first tax year after the recovery period, the unrecovered basis will be deductible. 2011 1040 ez form Exception. 2011 1040 ez form   For the tax year in which you placed 15-, 18-, or 19-year real property in service or in the tax year you dispose of it, you compute the ACRS deduction for the number of months that the property is in service during that tax year. 2011 1040 ez form You compute the number of months using either a full month or mid-month convention. 2011 1040 ez form This is true regardless of the number of months in the tax year and the recovery period and method used. 2011 1040 ez form Dispositions A disposition is the permanent withdrawal of property from use in your trade or business or in the production of income. 2011 1040 ez form You can make a withdrawal by sale, exchange, retirement, abandonment, or destruction. 2011 1040 ez form You generally recognize gain or loss on the disposition of an asset by sale. 2011 1040 ez form However, nonrecognition rules can allow you to postpone some gain. 2011 1040 ez form See Publication 544. 2011 1040 ez form If you physically abandon property, you can deduct as a loss the adjusted basis of the asset at the time of its abandonment. 2011 1040 ez form Your intent must be to discard the asset so that you will not use it again or retrieve it for sale, exchange, or other disposition. 2011 1040 ez form Early dispositions. 2011 1040 ez form   The disposal of an asset before the end of its specified recovery period, is referred to as an early disposition. 2011 1040 ez form When an early disposition occurs, the depreciation deduction in the year of disposition depends on the class of property involved. 2011 1040 ez form Early dispositions of ACRS property other than 15-, 18-, or 19-year real property. 2011 1040 ez form   Generally, you get no ACRS deduction for the tax year in which you dispose of or retire recovery property, except for 15-, 18-, and 19-year real property. 2011 1040 ez form This means there is no depreciation deduction under ACRS in the year you dispose of or retire any of your 3-, 5-, or 10-year recovery property. 2011 1040 ez form Dispositions — mass asset accounts. 2011 1040 ez form   The law provides a special rule to avoid the calculation of gain on the disposition of assets from mass asset accounts. 2011 1040 ez form A mass asset account includes items usually minor in value in relation to the group, numerous in quantity, impractical to separately identify, and not usually accounted for on a separate basis, but on a total dollar value. 2011 1040 ez form Examples of mass assets include minor items of office, plant, and store furniture and fixtures. 2011 1040 ez form   Under the special rule, if you elected to use a mass asset account, you recognize gain to the extent of the proceeds from the disposition of the asset. 2011 1040 ez form You leave the unadjusted basis of the property in the account until recovered in future years. 2011 1040 ez form If you did this, include the total proceeds realized from the disposition in income on the tax return for the year of disposition. 2011 1040 ez form Early dispositions — 15-year real property. 2011 1040 ez form   If you dispose of 15-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. 2011 1040 ez form You use a full-month convention. 2011 1040 ez form For a disposition at any time during a particular month before the end of the recovery period, no deduction is allowed for the month of disposition. 2011 1040 ez form This applies whether you use the regular ACRS method or elected the alternate ACRS method. 2011 1040 ez form Example. 2011 1040 ez form You purchased and placed in service a rental house on March 2, 1984, for $98,000 (not including the cost of land). 2011 1040 ez form You file your return based on a calendar year. 2011 1040 ez form Your rate from Table 1 for the third month is 10%. 2011 1040 ez form Your ACRS deduction for 1984 was $9,800 ($98. 2011 1040 ez form 000 ÷ 10%). 2011 1040 ez form For 1985 through 1988, you figured your ACRS deductions using 11%, 9%, 8%, and 7% ÷ $98,000. 2011 1040 ez form For 1989 through 1992, you figured your ACRS deductions using 6% for each year. 2011 1040 ez form The deduction each year was $98,000 ÷ 6%. 2011 1040 ez form For 1993 and 1994, the ACRS deduction is ($98,000 ÷ 5%) $4,900 for each year. 2011 1040 ez form You sell the house on June 1, 1995. 2011 1040 ez form You figure your ACRS deduction for 1995 for the full year and then prorate that amount for the months of use. 2011 1040 ez form The full ACRS deduction for 1995 is $4,900 ($98,000 ÷ 5%). 2011 1040 ez form You then prorate this amount to the 5 months in 1995 during which it was rented. 2011 1040 ez form Your ACRS deduction for 1995 is $2,042 ($4,900 ÷ 5/12). 2011 1040 ez form Early dispositions — 18- and 19-year real property. 2011 1040 ez form   If you dispose of 18- or 19-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. 2011 1040 ez form For 18-year property placed in service before June 23, 1984, use a full-month convention on a disposition. 2011 1040 ez form For 18-year property placed in service after June 22, 1984, and for 19-year property, determine the number of months in use by using the mid-month convention. 2011 1040 ez form Under the mid-month convention,treat real property disposed of any time during a month as disposed of in the middle of that month. 2011 1040 ez form Count the month of disposition as half a month of use. 2011 1040 ez form Example. 2011 1040 ez form You purchased and placed in service a rental house on July 2, 1984, for $100,000 (not including the cost of land). 2011 1040 ez form You file your return based on a calendar year. 2011 1040 ez form Your rate from Table 4 for the seventh month is 4%. 2011 1040 ez form You figured your ACRS deduction for 1984 was $4,000 ($100,000 ÷ 4%). 2011 1040 ez form In 1985 through 1994, your ACRS deductions were 9%, 8%, 8%, 7%, 6%, 6%, 5%, 5%, and 5% ÷ $100,000. 2011 1040 ez form You sell the house on September 24, 1995. 2011 1040 ez form Figure your ACRS deduction for 1995 for the months of use. 2011 1040 ez form The full ACRS deduction for 1995 is $5,000 ($100,000 ÷ 5%). 2011 1040 ez form Prorate this amount for the 8. 2011 1040 ez form 5 months in 1995 that you held the property. 2011 1040 ez form Under the mid-month convention, you count September as half a month. 2011 1040 ez form Your ACRS deduction for 1995 is $3,542 ($5,000 ÷ 8. 2011 1040 ez form 5/12). 2011 1040 ez form Depreciation Recapture If you dispose of property depreciated under ACRS that is section 1245 recovery property, you will generally recognize gain or loss. 2011 1040 ez form Gain recognized on a disposition is ordinary income to the extent of prior depreciation deductions taken. 2011 1040 ez form This recapture rule applies to all personal property in the 3-year, 5-year, and 10-year classes. 2011 1040 ez form You recapture gain on manufactured homes and theme park structures in the 10-year class as section 1245 property. 2011 1040 ez form Section 1245 property generally includes all personal property. 2011 1040 ez form See Section 1245 property in chapter 4 of Publication 544 for more information. 2011 1040 ez form You treat dispositions of section 1250 real property on which you have a gain as section 1245 recovery property. 2011 1040 ez form You recognize gain on this property as ordinary income to the extent of prior depreciation deductions taken. 2011 1040 ez form Section 1250 property includes most real property. 2011 1040 ez form See Section 1250 property in chapter 4 of Publication 544 for more information. 2011 1040 ez form This rule applies to all section 1250 real property except the following property: Any 15-, 18-, or 19-year real property that is residential rental property. 2011 1040 ez form Any 15-, 18-, or 19-year real property that you elected to depreciate using the alternate ACRS method. 2011 1040 ez form Any 15-, 18-, or 19-year real property that is subsidized low-income housing. 2011 1040 ez form For these recapture rules, you treat the section 179 deduction and 50% of the investment credit that reduced your basis as depreciation. 2011 1040 ez form See Publication 544 for further discussion of dispositions of section 1245 and 1250 property. 2011 1040 ez form Prev  Up  Next   Home   More Online Publications