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Appendix B — Table of Class Lives and Recovery Periods
The Table of Class Lives and Recovery
Periods has two sections. The first sec-
tion, Specific Depreciable Assets Used
in All Business Activities, Except as
Noted, generally lists assets used in all
business activities. It is shown as Table
B-1. The second section, Depreciable
Assets Used in the Following Activities,
describes assets used only in certain
activities. It is shown as Table B-2.
How To Use the Tables
You will need to look at both Table B-1
and Table B-2 to find the correct recov-
ery period. Generally, if the property is
listed in Table B-1, you use the recov-
ery period shown in that table. How-
ever, if the property is specifically listed
in Table B-2 under the type of activity in
which it is used, you use the recovery
period listed under the activity in that
table. Use the tables in the order
shown below to determine the recovery
period of your depreciable property.
Table B-1. Check Table B-1 for a de-
scription of the property. If it is descri-
bed in Table B-1, also check Table B-2
to find the activity in which the property
is being used. If the activity is descri-
bed in Table B-2, read the text (if any)
under the title to determine if the prop-
erty is specifically included in that as-
set class. If it is, use the recovery pe-
riod shown in the appropriate column
of Table B-2 following the description of
the activity. If the activity is not descri-
bed in Table B-2 or if the activity is de-
scribed but the property either is not
specifically included in or is specifically
excluded from that asset class, then
use the recovery period shown in the
appropriate column following the de-
scription of the property in Table B-1.
Tax-exempt use property subject to
a lease. The recovery period for ADS
cannot be less than 125% of the lease
term for any property leased under a
leasing arrangement to a tax-exempt
organization, governmental unit, or for-
eign person or entity (other than a part-
nership).
Table B-2. If the property is not listed
in Table B-1, check Table B-2 to find
the activity in which the property is be-
ing used and use the recovery period
shown in the appropriate column fol-
lowing the description.
Property not in either table. If the
activity or the property is not included
in either table, check the end of Table
B-2 to find Certain Property for Which
Recovery Periods Assigned. This prop-
erty generally has a recovery period of
7 years for GDS or 12 years for ADS.
See Which Property Class Applies Un-
der GDS? and Which Recovery Period
Applies? in chapter 4 for the class lives
or the recovery periods for GDS and
ADS for the following.
•
Residential rental property and
nonresidential real property (also
see Appendix A, Chart 2).
•
Qualified rent-to-own property.
•
A motorsport entertainment com-
plex.
•
Any retail motor fuels outlet.
•
Initial clearing and grading land im-
provements for gas utility property
and electric utility transmission and
distribution plants.
•
Any water utility property.
•
Certain electric transmission prop-
erty used in the transmission at 69
or more kilovolts of electricity for
sale and placed in service after
April 11, 2005.
•
Natural gas gathering and distribu-
tion lines placed in service after
April 11, 2005.
Example 1. You are a paper manu-
facturer. During the year, you made
substantial improvements to the land
on which your paper plant is located.
You check Table B-1 and find land im-
provements under asset class 00.3.
You then check Table B-2 and find your
activity, paper manufacturing, under
asset class 26.1, Manufacture of Pulp
and Paper. You use the recovery period
under this asset class because it spe-
cifically includes land improvements.
The land improvements have a 13-year
class life and a 7-year recovery period
for GDS. If you elect to use ADS, the
recovery period is 13 years. If you only
looked at Table B-1, you would select
asset class 00.3, Land Improvements,
and incorrectly use a recovery period
of 15 years for GDS or 20 years for
ADS.
Example 2. You produce rubber
products. During the year, you made
substantial improvements to the land
on which your rubber plant is located.
You check Table B-1 and find land im-
provements under asset class 00.3.
You then check Table B-2 and find your
activity, producing rubber products, un-
der asset class 30.1, Manufacture of
Rubber Products. Reading the head-
ings and descriptions under asset
class 30.1, you find that it does not in-
clude land improvements. Therefore,
you use the recovery period under as-
set class 00.3. The land improvements
have a 20-year class life and a 15-year
recovery period for GDS. If you elect to
use ADS, the recovery period is 20
years.
Example 3. You own a retail cloth-
ing store. During the year, you pur-
chased a desk and a cash register for
use in your business. You check Table
B-1 and find office furniture under as-
set class 00.11. Cash registers are not
listed in any of the asset classes in Ta-
ble B-1. You then check Table B-2 and
find your activity, retail store, under as-
set class 57.0, Distributive Trades and
Services, which includes assets used
in wholesale and retail trade. This
asset class does not specifically list of-
fice furniture or a cash register. You
look back at Table B-1 and use asset
class 00.11 for the desk. The desk has
a 10-year class life and a 7-year recov-
ery period for GDS. If you elect to use
ADS, the recovery period is 10 years.
For the cash register, you use asset
class 57.0 because cash registers are
not listed in Table B-1 but it is an asset
used in your retail business. The cash
register has a 9-year class life and a
5-year recovery period for GDS. If you
elect to use the ADS method, the re-
covery period is 9 years.
96 Publication 946 (2023)