The Accelerated Cost Recovery System (often abbreviated as ACRS) is a system of depreciation introduced by the Economic Recovery Tax Act of 1981 and only applies to properties placed in service between 1981 and 1987.
If you own property for the purpose of producing income, or for use in a trade or business, tax rules within the ACRS permit you to recover funds through depreciation deductions. Property depreciable under ACRS is called recovery property. If you began utilizing your recovery property during this period for work or rental income, you must continue to figure out your depreciation under the ACRS.
How do you figure out what your depreciation deduction is?
Set percentages are used to recover the unadjusted basis of recovery property. Unadjusted basis is the original cost of the property without regard to salvage value.To figure out your depreciation deduction, you must multiply the set percentage for the property’sparticular recovery class by the unadjusted basis of the recovery property.
NOTE: It is recommended that you work with a Certified Public Accountant (CPA) to insure accurateness and maximum deduction.
The Modified Accelerated Cost Recovery System (MACRS) replaced ACRS for properties placed into service after 1986 – If this applies to you, you must use MACRS as your system of depreciation.
