MACRS 15-Year Property — Depreciation Schedule 2025 & 2026

What qualifies as 15-Year property?

• Land improvements — fences, sidewalks, parking lots, landscaping
• Qualified improvement property (QIP) — interior improvements to nonresidential buildings
• Qualified retail improvement property (post-TCJA rolled into QIP)
• Qualified restaurant property (post-TCJA rolled into QIP)
• Gas station building improvements and certain wharves
• Municipal wastewater treatment plants and telephone distribution plant (pole lines, cable, underground conduits)

Source: IRS Publication 946, Table A-1. If your asset is not explicitly classified, consult Rev. Proc. 87-56 asset-class tables or default to 7-year property.

MACRS depreciation schedule — $250,000 asset

Worked example: a $250,000 property placed in service with no Section 179 and no bonus depreciation, showing the raw 15-Year MACRS schedule.

Rates from IRS Publication 946 Table A-1. Computed at build time — no hardcoded schedules.

IRS Table A-1: the full 15-year MACRS depreciation table

The complete 15-year recovery-percentage table under the General Depreciation System (GDS), half-year convention — the same percentages published in IRS Publication 946, Appendix A, Table A-1 — shown per $100,000 of depreciable basis. The method is 150% declining balance, switching to straight line, which is why year 1 shows only half of the full-year rate.

Percentages computed at build time by the same engine that powers the depreciation calculator and verified against IRS Publication 946 Table A-1. Assumes no §179 or bonus depreciation and the half-year convention. To apply a rate, multiply your remaining depreciable basis (after any §179 and bonus) by the percentage for that recovery year.

With §179 + 100% bonus depreciation

For a $250,000 asset placed in service in 2026, electing §179 expensing (up to $2,560,000) plus 100% bonus depreciation on the remaining basis.

With §179 capped at the full asset cost and 100% bonus on the rest, a 2026 purchase can be nearly fully expensed in year one — subject to business-income limitations for §179 and placed-in-service date for bonus depreciation.

Section 179 and bonus depreciation — 2025 vs 2026

Source: One Big Beautiful Bill Act (signed July 2025) and IRS Rev. Proc. 2025-32 (2026 inflation adjustments). The 100% allowance is keyed to the ACQUISITION date, not the placed-in-service date (OBBBA §70301(c)(1)): property acquired before 2025-01-20 stays on the pre-OBBBA §168(k)(6)(A) phase-down for whatever year it is placed in service — 80% (2023), 60% (2024), 40% (2025), 20% (2026), 0% from 2027.

How §179, bonus depreciation, and MACRS stack

1. Section 179 comes first. You elect a dollar amount up to $2,560,000 (2026), reduced dollar-for-dollar once total qualifying purchases exceed $4,090,000. The deduction cannot exceed your business taxable income — any excess carries forward.
2. Bonus depreciation applies to what is left. 100% of the remaining basis is deducted automatically for qualifying property acquired on or after 2025-01-20, unless you elect out for the class. Unlike §179, bonus has no dollar cap and no business-income limit — it can create a net operating loss.
3. Regular MACRS covers the remainder. Whatever basis survives §179 and bonus follows the 15-year percentage table above over 16 tax years.

Because bonus is 100% for property acquired on or after 2025-01-20, the MACRS table only governs basis you deliberately leave behind — by electing out of bonus, electing less than full §179, or hitting the business-income limit.

Half-year vs mid-quarter convention

The percentage table above assumes the half-year convention — the default, which treats every asset as placed in service at the midpoint of the year regardless of the actual date. IRS Publication 946 requires the mid-quarter convention instead when more than 40% of the aggregate depreciable basis of ALL MACRS personal property placed in service during the year goes into service in the last 3 months of the tax year.

When the test is failed, every personal-property asset placed in service that year switches to its mid-quarter table: each asset is treated as placed in service at the midpoint of its quarter, so a fourth-quarter purchase earns only 1.5 months of first-year depreciation instead of 6, while a first-quarter purchase earns 10.5 months. Two planning notes: basis you expense under §179 is excluded from the 40% test, and real property never counts toward it — so timing large Q4 equipment purchases (or covering them with §179) preserves the half-year convention for everything else.

Source: IRS Publication 946, ch. 4, "Which Convention Applies?" The mid-quarter percentage tables are Tables A-2 through A-5 in Appendix A.

GDS vs ADS for 15-year property

Everything above uses the General Depreciation System (GDS) — the default MACRS system. The Alternative Depreciation System (ADS) stretches the same basis over a longer period using straight-line only.

Both land improvements and qualified improvement property (QIP) use a 20-year ADS period — real property trades or businesses that elect out of the §163(j) interest limitation must depreciate QIP under ADS. On the $250,000 example, ADS spreads deductions evenly at about $12,500 per full year instead of front-loading them under 150% declining balance, switching to straight line.

Common mistakes and gotchas

• QIP was mistakenly left at 39-year property in the original TCJA text ("retail glitch"). The CARES Act retroactively fixed this to 15-year, effective 2018-01-01. Amending older returns may recover missed deductions.
• QIP must be made by the taxpayer AFTER the building was placed in service; improvements at original construction do not qualify.
• External improvements (roofs, HVAC, fire protection, alarms, security systems) to nonresidential property became §179-eligible post-TCJA but are NOT automatically QIP — confirm which regime applies.
• Land itself is never depreciable. Only improvements to the land (grading, paving, fencing) qualify as 15-year.

Frequently asked questions

MACRS asset classes compared

Run your own schedule with the MACRS depreciation calculator, and estimate the tax bill when you sell with the depreciation recapture calculator.