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Property Classes and Recovery Periods

Under MACRS, property is assigned to one of several property classes. These classes establish the recovery period (the number of years) over which you recover the basis of your property. The class the property is assigned to is generally determined by its class life. The shorter the recovery period, the sooner you get back the cost of your property.

Under GDS, property is assigned to one of nine classes which establish the period over which you recover the basis of the property. The following is a list of the nine classes with examples of the property included in each class.

3 year property

The 3 year property class includes:

  • tractor units for over the road use
  • any race horse over 2 years old when placed in service
  • any other horse over 12 years old when placed in service
  • qualified rent to own property
5 year property

This 5 year property class includes:

  • automobiles, taxis, buses, and trucks
  • computers and peripheral equipment
  • office machinery (such as typewriters, calculators and copiers)
  • any property used in research and experimentation
  • breeding cattle and dairy cattle
  • carpets, appliances, furniture, etc. used in residential rental property.
7 year property

7 year property class includes:

  • office furniture and fixtures (such as desks, files, and safes)
  • agricultural machinery and equipment
  • any property that does not have a class life and that has not been designated by law as being in any other class
10 year property

10 year property. This class includes the following:

  • vessels, barges, tugs, and similar water transportation equipment
  • any single purpose agricultural or horticultural structure
  • any tree or vine bearing fruit or nuts
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