4562 Instructions for Form 4562

2019

Instructions for Form 4562

Department of the Treasury
Internal Revenue Service

Depreciation and Amortization (Including Information on Listed Property)
Section references are to the Internal Revenue
Code unless otherwise noted.

Future Developments

For the latest information about
developments related to Form 4562 and
its instructions, such as legislation
enacted after this form and instructions
were published, go to IRS.gov/
Form4562.

What's New
Section 179 deduction dollar limits.
For tax years beginning in 2019, the
maximum section 179 expense
deduction is $1,020,000 ($1,055,000 for
qualified enterprise zone property). This
limit is reduced by the amount by which
the cost of section 179 property placed
in service during the tax year exceeds
$2,550,000. Also, the maximum section
179 expense deduction for sport utility
vehicles placed in service in tax years
beginning in 2019 is $25,500. See the
instructions for Part I.
Extension of certain depreciation
provisions. Recent legislation has
extended the following depreciation
provisions. You may be eligible to claim
these deductions for 2018 and 2019.
• The increase in the maximum section
179 deduction by $35,000 for qualified
enterprise zone property placed in
service before January 1, 2021, in an
empowerment zone. See the
instructions for Line 1, later.
• The special depreciation allowance
for qualified second generation biofuel
plant property placed in service before
January 1, 2021. See Qualified second
generation biofuel plant property, later.
• The 3-year recovery period for race
horses 2 years old or younger placed in
service before January 1, 2021. See the
instructions for Lines 19a Through 19i,
later.
• The treatment of qualified
motorsports entertainment complexes
placed in service before January 1,
2021, as 7-year property under
MACRS. See the instructions for Lines
19a Through 19i, later.
• The accelerated recovery period for
qualified Indian reservation property
placed in service before January 1,
2021. See Indian reservation property,
later.
Jan 27, 2020

If you are eligible to take the first
benefit for the 2018 tax year, you will
need to file an amended tax return to
claim it. If you are eligible to take any of
the other benefits for the 2018 tax year,
you will need to file an amended tax
return for the 2018 tax year before you
file your return for the 2019 tax year, or
file a Form 3115 with your return for the
2019 tax year or a subsequent tax year,
to claim them.

General Instructions
Purpose of Form

Use Form 4562 to:
• Claim your deduction for depreciation
and amortization,
• Make the election under section 179
to expense certain property, and
• Provide information on the business/
investment use of automobiles and
other listed property.

Who Must File

Except as otherwise noted, complete
and file Form 4562 if you are claiming
any of the following.
• Depreciation for property placed in
service during the 2019 tax year.
• A section 179 expense deduction
(which may include a carryover from a
previous year).
• Depreciation on any vehicle or other
listed property (regardless of when it
was placed in service).
• A deduction for any vehicle reported
on a form other than Schedule C (Form
1040 or 1040-SR), Profit or Loss From
Business.
• Any depreciation on a corporate
income tax return (other than Form
1120-S).
• Amortization of costs that begins
during the 2019 tax year.
If you are an employee deducting
job-related vehicle expenses using
either the standard mileage rate or
actual expenses, use Form 2106,
Employee Business Expenses, for this
purpose.
File a separate Form 4562 for each
business or activity on your return for
which Form 4562 is required. If you
need more space, attach additional
sheets. However, complete only one
Cat. No. 12907Y

Part I in its entirety when computing
your section 179 expense deduction.
See the instructions for line 12, later.

Additional Information

For more information about depreciation
and amortization (including information
on listed property), see the following.
• Pub. 463, Travel, Gift, and Car
Expenses.
• Pub. 534, Depreciating Property
Placed in Service Before 1987.
• Pub. 535, Business Expenses.
• Pub. 551, Basis of Assets.
• Pub. 946, How To Depreciate
Property.

Definitions
Depreciation

Depreciation is the annual deduction
that allows you to recover the cost or
other basis of your business or
investment property over a certain
number of years. Depreciation starts
when you first use the property in your
business or for the production of
income. It ends when you either take the
property out of service, deduct all your
depreciable cost or basis, or no longer
use the property in your business or for
the production of income.
Generally, you can depreciate:

• Tangible property such as buildings,

machinery, vehicles, furniture, and
equipment; and
• Intangible property such as patents,
copyrights, and computer software.
Exception. You cannot depreciate
land.

Accelerated Cost Recovery
System

The Accelerated Cost Recovery System
(ACRS) applies to property first used
before 1987. It is the name given for the
tax rules that allow a taxpayer to recover
through depreciation deductions the
cost of property used in a trade or
business or to produce income. These
rules are mandatory and generally apply
to tangible property placed in service
after 1980 and before 1987. If you
placed property in service during this
period, you must continue to figure your
depreciation under ACRS.

ACRS consists of accelerated
depreciation methods and an alternate
ACRS method that could have been
elected. The alternate ACRS method
used a recovery percentage based on a
modified straight line method. See the
instructions for line 16 for more
information. For a complete discussion
of ACRS, see Pub. 534.

Modified Accelerated Cost
Recovery System

The Modified Accelerated Cost
Recovery System (MACRS) is the
current method of accelerated asset
depreciation required by the tax code.
Under MACRS, all assets are divided
into classes which dictate the number of
years over which an asset's cost will be
recovered. Each MACRS class has a
predetermined schedule which
determines the percentage of the
asset's costs which is depreciated each
year. For more information, see Part III.
MACRS Depreciation, later. For a
complete discussion of MACRS, see
chapter 4 of Pub. 946.

Section 179 Property

Section 179 property is property that
you acquire by purchase for use in the
active conduct of your trade or
business, and is one of the following.
• Qualified section 179 real property.
For more information, see Special rules
for qualified section 179 real property,
later.
• Tangible personal property, including
cellular telephones, similar
telecommunications equipment, and air
conditioning or heating units (for
example, portable air conditioners or
heaters). Also, tangible personal
property may include certain property
used mainly to furnish lodging or in
connection with the furnishing of lodging
(except as provided in section 50(b)(2)).
• Other tangible property (except
buildings and their structural
components) used as:
1. An integral part of manufacturing,
production, or extraction, or of
furnishing transportation,
communications, electricity, gas, water,
or sewage disposal services;
2. A research facility used in
connection with any of the activities in
(1) above; or
3. A facility used in connection with
any of the activities in (1) above for the
bulk storage of fungible commodities.
• Single purpose agricultural (livestock)
or horticultural structures.
• Storage facilities (except buildings
and their structural components) used in

connection with distributing petroleum
or any primary product of petroleum.
• Off the shelf computer software.

starting a business, goodwill, and
certain other intangibles. See the
instructions for Part VI.

Section 179 property does not
include the following.
• Property held for investment (section
212 property).
• Property used mainly outside the
United States (except for property
described in section 168(g)(4)).
• Property used by a tax-exempt
organization (other than a section 521
farmers' cooperative) unless the
property is used mainly in a taxable
unrelated trade or business.
• Property used by a governmental unit
or foreign person or entity (except for
property used under a lease with a term
of less than 6 months).

Listed property generally includes the
following.
• Passenger automobiles weighing
6,000 pounds or less. See Limits for
passenger automobiles, later.
• Any other property used for
transportation if the nature of the
property lends itself to personal use,
such as motorcycles, pick-up trucks,
sport utility vehicles, etc.
• Any property used for entertainment
or recreational purposes (such as
photographic, phonographic,
communication, and video recording
equipment).

See the instructions for Part I and
Pub. 946.
Special rules for qualified section
179 real property. You can elect to
treat certain qualified real property
placed in service during the tax year as
section 179 property. See Election for
certain qualified section 179 real
property in Part I for information on how
to make this election. If the election is
made, the term "section 179 property"
will include any qualified real property
which is:
• Qualified improvement property as
described in section 168(e)(6), and
• Any of the following improvements to
nonresidential real property placed in
service after the date the nonresidential
real property was first placed in service.
1. Roofs.
2. Heating, ventilation, and
air-conditioning property.
3. Fire protection and alarm
systems.
4. Security systems.
This property is considered "qualified
section 179 real property."
A deduction attributable to qualified
section 179 real property which is
disallowed under the trade or business
income limitation (see Business Income
Limit in chapter 2 of Pub. 946) for 2019
can be carried over to 2020. Thus, the
amount of any 2019 disallowed section
179 expense deduction attributable to
qualified section 179 real property will
be reported on line 13 of Form 4562.

Amortization

Amortization is similar to the straight line
method of depreciation in that an annual
deduction is allowed to recover certain
costs over a fixed time period. You can
amortize such items as the costs of
-2-

Listed Property

Exceptions. Listed property does not
include:
1. Photographic, phonographic,
communication, or video equipment
used exclusively in a taxpayer's trade or
business or at the taxpayer's regular
business establishment;
2. Any computer or peripheral
equipment used exclusively at a regular
business establishment and owned or
leased by the person operating the
establishment;
3. An ambulance, hearse, or vehicle
used for transporting persons or
property for compensation or hire; or
4. Any truck or van placed in service
after July 6, 2003, that is a qualified
nonpersonal use vehicle.
For purposes of the exceptions
above, a portion of the taxpayer's home
is treated as a regular business
establishment only if that portion meets
the requirements for deducting
expenses attributable to the business
use of a home. However, for any
property listed in (1) above, the regular
business establishment of an employee
is his or her employer's regular business
establishment.

Commuting

Generally, commuting is defined as
travel between your home and a work
location. However, travel that meets any
of the following conditions is not
commuting.
• You have at least one regular work
location away from your home and the
travel is to a temporary work location in
the same trade or business, regardless
of the distance. Generally, a temporary
work location is one where your
employment is expected to last 1 year
or less. See Pub. 463 for details.

• The travel is to a temporary work
location outside the metropolitan area
where you live and normally work.
• Your home is your principal place of
business for purposes of deducting
expenses for business use of your
home and the travel is to another work
location in the same trade or business,
regardless of whether that location is
regular or temporary and regardless of
distance.

Alternative Minimum Tax
(AMT)

Depreciation may be an adjustment for
the AMT. However, no adjustment
applies in several instances. See Form
6251, Alternative Minimum
Tax—Individuals; Schedule I (Form
1041), Alternative Minimum
Tax—Estates and Trusts; and the
related instructions.

Recordkeeping

Except for Part V (relating to listed
property), the IRS does not require you
to submit detailed information with your
return on the depreciation of assets
placed in service in previous tax years.
However, the information needed to
compute your depreciation deduction
(basis, method, etc.) must be part of
your permanent records.
You may use the depreciation
TIP worksheet, later, to assist you in
maintaining depreciation
records. However, the worksheet is
designed only for federal income tax
purposes. You may need to keep
additional records for accounting and
state income tax purposes.

Specific Instructions
Part I. Election To Expense
Certain Property Under
Section 179
Note. An estate or trust cannot make
this election.
You can elect to expense part or all
of the cost of section 179 property
(defined earlier) that you placed in
service during the tax year and used
predominantly (more than 50%) in your
trade or business.
However, for taxpayers other than a
corporation, this election does not apply
to any section 179 property you
purchased and leased to others unless:
• You manufactured or produced the
property; or

• The term of the lease is less than
50% of the property's class life and, for
the first 12 months after the property is
transferred to the lessee, the deductions
related to the property allowed to you as
trade or business expenses (except
rents and reimbursed amounts) are
more than 15% of the rental income
from the property.
Election. You must make the election
on Form 4562 filed with either:
• The original return you file for the tax
year the property was placed in service
(whether or not you file your return on
time), or
• An amended return filed within the
time prescribed by law for the applicable
tax year. The election made on an
amended return must specify the item of
section 179 property to which the
election applies and the part of the cost
of each such item to be taken into
account. The amended return must also
include any resulting adjustments to
taxable income.
Election for certain qualified
section 179 real property. You can
elect to expense certain qualified real
property that you first placed in service
as section 179 property for tax years
beginning in 2019. For more
information, see Election above.
Revocation. The election (or any
specification made in the election) can
be revoked without obtaining IRS
approval by filing an amended return.
The amended return must be filed within
the time prescribed by law for the
applicable tax year. The amended
return must include any resulting
adjustments to taxable income or to the
tax liability (for example, allowable
depreciation in that tax year for the item
of section 179 property to which the
revocation pertains). For more
information and examples, see
Regulations section 1.179-5(c)(3) and
(c)(4). Once made, the revocation is
irrevocable.
If you elect to expense section
179 property, you must reduce
CAUTION the amount on which you figure
your depreciation or amortization
deduction (including any special
depreciation allowance) by the section
179 expense deduction.

!

Line 1

Generally, the maximum section 179
expense deduction is $1,020,000 for
section 179 property (including qualified
section 179 real property) placed in
service during the tax year beginning in
2019.
-3-

You can use Worksheet 1 to

TIP assist you in determining the
amount to write on line 1.

For an enterprise zone business, the
maximum deduction is increased by the
smaller of:
• $35,000; or
• The cost of section 179 property that
is also qualified empowerment zone
property placed in service before
January 1, 2021 (including such
property placed in service or purchased
by your spouse, even if you are filing a
separate return).
Recapture rule. If the section 179
property is not used predominantly
(more than 50%) in your trade or
business at any time before the end of
the property's recovery period, the
benefit of the section 179 expense
deduction must be reported as “other
income” on your return.
If any qualified section 179 disaster
assistance property ceases to be used
in the applicable federally declared
disaster area in any year after you claim
the increased section 179 expense
deduction for that property, the benefit
of the increased section 179 expense
deduction must be reported as “other
income” on your return. Similar rules
apply if qualified Liberty Zone property
ceases to be used in the Liberty Zone, if
qualified section 179 GO Zone property
ceases to be used in the GO Zone, if
qualified section 179 Recovery
Assistance property ceases to be used
in the Recovery Assistance area, if
qualified empowerment zone property
ceases to be used in an empowerment
zone by an enterprise zone business, or
if qualified renewal property ceases to
be used in a renewal community by a
renewal community business in any
year after you claim the increased
section 179 expense deduction.

Line 2

Enter the total cost of all section 179
property you placed in service during
the tax year (including the total cost of
qualified real property that you elect to
treat as section 179 property). Also,
include the cost of the following.
• Any listed property from Part V.
• Any property placed in service by
your spouse, even if you are filing a
separate return. This includes qualified
section 179 real property your spouse
made the election to treat as section
179 property for 2019.

Line 3

The amount of section 179 property for
which you can make the election is

Worksheet 1. Worksheet for Lines 1, 2, and
3

Keep for Your Records

Maximum section 179 limitation calculation.
1.* Enter total cost of section 179 property (including qualified section 179 real
property) placed in service during the tax year beginning in 2019 . . . . . . . . .
2. The maximum section 179 deduction limitation for 2019

...............

$1,020,000

3. Enter the smaller of line 1 or line 2 here . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. If you have an enterprise zone business (see the instructions for Line 1,
earlier), enter the smaller of $35,000 or the cost of the qualified section 179
property that is also qualified empowerment zone property . . . . . . . . . . . . .
5. Add lines 3 and 4. Enter this amount here and on Form 4562, line 1

Maximum threshold cost of section 179 property before reduction in limitation calculation.
6. Enter the amount from line 1 here and on Form 4562, line 2 . . . . . . . . . . . . .
$2,550,000

Maximum elected cost for Form 4562, lines 6 and 7, column (c).
8. Enter the smaller of line 1 or line 5. The total amount you enter on Form
4562, lines 6 and 7, column (c), cannot exceed this amount . . . . . . . . .
* For line 1 of this worksheet, include the total amount of eligible section 179 property (including qualified section
179 real property), not just the amount for which you are making the election. See the instructions for Line 2.

limited to the maximum dollar amount
on line 1. This amount is reduced if the
cost of all section 179 property placed in
service in 2019 is more than
$2,550,000.
For a partnership (other than an
electing large partnership), these
limitations apply to the partnership and
each partner. For an electing large
partnership, the limitations apply only to
the partnership. For an S corporation,
these limitations apply to the S
corporation and each shareholder. For a
controlled group, all component
members are treated as one taxpayer.

Line 5

If line 5 is zero, you cannot elect to
expense any section 179 property. In
this case, skip lines 6 through 11, enter
zero on line 12, and enter the carryover
of any disallowed deduction from 2018
(which does not include amounts
attributable to qualified section 179 real
property) on line 13.
See Special rules for qualified
section 179 real property, earlier.
If you are married filing separately,
you and your spouse must allocate the
dollar limitation for the tax year. To do
so, multiply the total limitation that you
would otherwise enter on line 5 by 50%
(0.50), unless you both elect a different
allocation. If you both elect a different
allocation, multiply the total limitation by
the percentage elected. The sum of the
percentages you and your spouse elect
must equal 100%.

Do not enter on line 5 more than your
share of the total dollar limitation.

Line 6

Do not include any listed property on
line 6. Enter the elected section 179
cost of listed property in column (i) of
line 26.

Column (a)—Description of property. Enter a brief description of the
property you elect to expense (for
example, truck, office furniture, qualified
improvement property, roof, etc.).
Column (b)—Cost (business use only). Enter the cost of the property. If you
acquired the property through a
trade-in, do not include any carryover
basis of the property traded in. Include
only the excess of the cost of the
property over the value of the property
traded in.
Column (c)—Elected cost. Enter the
amount you elect to expense. You can
depreciate the amount you do not
expense. See the line 19 and line 20
instructions.
To report your share of a section 179
expense deduction from a partnership
or an S corporation, write “from
Schedule K-1 (Form 1065)” or “from
Schedule K-1 (Form 1120-S)” across
columns (a) and (b).

Line 7

Enter the amount that you elected to
expense for listed property (defined
earlier) on line 29 here. For more
-4-

Line 10

The carryover of disallowed deduction
from 2018 is the amount of section 179
property, if any, you elected to expense
in previous years that was not allowed
as a deduction because of the business
income limitation. If you filed Form 4562
for 2018, enter the amount from line 13
of your 2018 Form 4562.

Line 11

.......

7. Base maximum threshold cost of section 179 property before reduction in
limitation for 2019. Enter this amount on Form 4562, line 3 . . . . . . . . . . . . . .

information, see Part V—Listed
Property, later.

The total cost you can deduct is limited
to your taxable income from the active
conduct of a trade or business during
the year. You are considered to actively
conduct a trade or business only if you
meaningfully participate in its
management or operations. A mere
passive investor is not considered to
actively conduct a trade or business.

Note. If you have to apply another
Code section that has a limitation based
on taxable income, see Pub. 946 for
rules on how to apply the business
income limitation for the section 179
expense deduction.
Individuals. Enter the smaller of line 5
or the total taxable income from any
trade or business you actively
conducted, computed without regard to
any section 179 expense deduction, the
deduction for one-half of
self-employment taxes under section
164(f), or any net operating loss
deduction. Also, include all wages,
salaries, tips, and other compensation
you earned as an employee (from Form
1040 or 1040-SR, line 1). Do not reduce
this amount by unreimbursed employee
business expenses. If you are married
filing a joint return, combine the total
taxable incomes for you and your
spouse.
Partnerships. Enter the smaller of
line 5 or the partnership's total items of
income and expense described in
section 702(a) from any trade or
business the partnership actively
conducted (other than credits,
tax-exempt income, the section 179
expense deduction, and guaranteed
payments under section 707(c)).
S corporations. Enter the smaller of
line 5 or the corporation's total items of
income and expense described in
section 1366(a) from any trade or
business the corporation actively
conducted (other than credits,
tax-exempt income, the section 179
expense deduction, and the deduction

for compensation paid to the
corporation's shareholder-employees).
Corporations other than S corporations. Enter the smaller of line 5 or the
corporation's taxable income before the
section 179 expense deduction, net
operating loss deduction, and special
deductions (excluding items not derived
from a trade or business actively
conducted by the corporation).

Line 12

The limitations on lines 5 and 11 apply
to the taxpayer, and not to each
separate business or activity. Therefore,
if you have more than one business or
activity, you may allocate your allowable
section 179 expense deduction among
them.
To do so, write “Summary” at the top
of Part I of the separate Form 4562 you
are completing for the total amounts
from all businesses or activities. Do not
complete the rest of that form. On
line 12 of the Form 4562 you prepare for
each separate business or activity, enter
the amount allocated to the business or
activity from the “Summary.” No other
entry is required in Part I of the separate
Form 4562 prepared for each business
or activity.

Part II. Special
Depreciation Allowance
and Other Depreciation
Line 14

For qualified property (defined below)
placed in service during the tax year,
you may be able to take an additional
special depreciation allowance. The
special depreciation allowance applies
only for the first year the property is
placed in service. The allowance is an
additional deduction you can take after
any section 179 expense deduction and
before you figure regular depreciation
under the modified accelerated cost
recovery system (MACRS).

Qualified property. You can take the
special depreciation allowance for
qualified second generation biofuel
plant property, certain qualified property
acquired before September 28, 2017,
certain qualified property acquired after
September 27, 2017, qualified reuse
and recycling property, and certain
plants bearing fruits and nuts.
Qualified second generation
biofuel plant property. Qualified
second generation biofuel plant
property is property used in the United
States solely to produce second

generation biofuel (as defined in section
40(b)(6)(E)).
The 50% special depreciation
allowance applies to qualified second
generation biofuel plant property. The
property must also meet the following
requirements.
• The original use of the property must
begin with you after December 20,
2006.
• You must have acquired the property
by purchase after December 20, 2006. If
a binding contract to acquire the
property existed before December 21,
2006, the property does not qualify.
• Qualified second generation biofuel
plant property must be placed in service
for use in your trade or business or for
the production of income before
January 1, 2021.
For property you sold and leased
back or for self-constructed property,
special rules apply. See section 168(l)
(4).
Certain qualified property
acquired before September 28, 2017.
Certain qualified property acquired
before September 28, 2017, and placed
in service in 2019, is eligible for a 30%
special depreciation allowance.
Property with a long production period
and certain aircraft acquired before
September 28, 2017, and placed in
service in 2019, is eligible for a 40%
special depreciation allowance.
Qualified property is:
• Tangible property depreciated under
MACRS with a recovery period of 20
years or less.
• Water utility property (see 25-year
property, later).
• Computer software defined in and
depreciated under section 167(f)(1).
Qualified property must also be
placed in service before January 1,
2020 (or before January 1, 2021, for
certain property with a long production
period and for certain aircraft). The
original use of the property must begin
with you.
Certain qualified property
acquired after September 27, 2017.
Certain qualified property (defined
below) acquired after September 27,
2017, and placed in service before
January 1, 2023 (or before January 1,
2024, for certain property with a long
production period and for certain
aircraft), is eligible for a special
depreciation allowance of 100% of the
depreciable basis of the property.
Qualified property is:

-5-

• Tangible property depreciated under
MACRS with a recovery period of 20
years or less.
• Computer software defined in and
depreciated under section 167(f)(1).
• Water utility property (see 25-year
property, later.
• Qualified film, television, and live
theatrical productions, as defined in
sections 181(d) and (e).
Qualified property must also be
placed in service before January 1,
2027 (or before January 1, 2028, for
certain property with a long production
period and for certain aircraft), and can
be either new property or certain used
property.
See Pub. 946 for more information.
Also, see section 168(k).
Qualified reuse and recycling
property. Certain qualified reuse and
recycling property (defined below)
placed in service after August 31, 2008,
is eligible for a 50% special depreciation
allowance.
Qualified reuse and recycling
property includes any machinery and
equipment (not including buildings or
real estate), along with any
appurtenance, that is used exclusively
to collect, distribute, or recycle qualified
reuse and recyclable materials. This
includes software necessary to operate
such equipment. See section 168(m)(3)
for more information.
Qualified reuse and recycling
property must also meet all of the
following tests.
• The property must be depreciated
under MACRS.
• The property must have a useful life
of at least 5 years.
• You must have acquired the property
by purchase after August 31, 2008. If a
binding contract to acquire the property
existed before September 1, 2008, the
property does not qualify.
• The property must be placed in
service after August 31, 2008.
• The original use of the property must
begin with you after August 31, 2008.
• For self-constructed property, special
rules apply. See section 168(m)(2)(C).
Qualified reuse and recycling
property does not include rolling stock
or other equipment used to transport
reuse and recyclable materials or any
property to which section 168(g) or (k)
applies.
Certain plants bearing fruits and
nuts. You can elect to claim a 100%
special depreciation allowance for the
adjusted basis of certain specified
plants (defined later) bearing fruits and

nuts planted or grafted after September
27, 2017, and before January 1, 2023.
A specified plant is:
• Any tree or vine that bears fruits or
nuts, and
• Any other plant that will have more
than one yield of fruits or nuts and
generally has a pre-productive period of
more than 2 years from planting or
grafting to the time it begins bearing
fruits or nuts.
Any property planted or grafted
outside the United States does not
qualify as a specified plant.
If you elect to claim the special
depreciation allowance for any specified
plant, the special depreciation
allowance applies only for the tax year
in which the plant is planted or grafted.
The plant will not be treated as qualified
property eligible for the special
depreciation allowance in the
subsequent tax year in which it is placed
in service.
To make the election, attach a
statement to your timely filed return
(including extensions) indicating you are
electing to apply section 168(k)(5) and
identifying the specified plant(s) for
which you are making the election.
Once made, the election cannot be
revoked without IRS consent.
See section 168(k)(5).
Exceptions. Qualified property does
not include:
• Listed property used 50% or less in a
qualified business use (as defined in the
instructions for lines 26 and 27);
• Any property required to be
depreciated under the alternative
depreciation system (ADS) (that is, not
property for which you elected to use
ADS);
• Property placed in service and
disposed of in the same tax year;
• Property converted from business or
income-producing use to personal use
in the same tax year it is acquired; or
• Property for which you elected not to
claim any special depreciation
allowance.
In addition, qualified second
generation biofuel plant property does
not include the following.
• Any tax-exempt bond financed
property under section 103.
• Any property for which a deduction
was taken under section 179C for
certain qualified refinery property.
• Other bonus depreciation property to
which section 168(k) applies.
See sections 168(l), 168(k) and
168(m) for additional information. Also,
see Pub. 946.

How to figure the allowance. Figure
the special depreciation allowance by
multiplying the depreciable basis of the
property by the applicable percentage.
To figure the depreciable basis,
subtract from the business/investment
portion of the cost or other basis of the
property any credits and deductions
allocable to the property. The following
are examples of some credits and
deductions that reduce the depreciable
basis.
• Section 179 expense deduction.
• Deduction for removal of barriers to
the disabled and the elderly.
• Disabled access credit.
• Enhanced oil recovery credit.
• Credit for employer-provided
childcare facilities and services.
• Basis adjustment to investment credit
property under section 50(c).
• Section 181 expense deduction.
For additional credits and deductions
that affect the depreciable basis, see
section 1016. Also, see Pub. 946.
Note. If you acquired qualified property
through a like-kind exchange or
involuntary conversion after September
27, 2017, and the qualified property is
new property, the carryover basis and
any excess basis of the acquired
property is eligible for the special
depreciation allowance.
Generally, a like-kind exchange after
December 31, 2017, is an exchange of
real property.
If you acquired qualified property
through a like-kind exchange or
involuntary conversion after September
27, 2017, and the qualified property is
used property, only the excess basis of
the acquired property is eligible for the
special depreciation allowance.
If you take the special
depreciation allowance, you
CAUTION must reduce the amount on
which you figure your regular
depreciation or amortization deduction
by the amount deducted. Also, you will
not have any AMT adjustment for
depreciation for the qualified property.

!

Election out. You can elect, for any
class of property, to not deduct any
special depreciation allowance for all
such property in such class placed in
service during the tax year.
To make an election, attach a
statement to your timely filed return
(including extensions) indicating the
class of property for which you are
making the election and that, for such
class, you are not to claim any special
depreciation allowance.
-6-

The election must be made
separately by each person owning
qualified property (for example, by the
partnership, by the S corporation, or for
each member of a consolidated group
by the common parent of the group).
If you timely filed your return without
making an election, you can still make
the election by filing an amended return
within 6 months of the due date of the
return (excluding extensions). Write
“Filed pursuant to section 301.9100-2”
on the amended return.
Once made, the election cannot be
revoked without IRS consent.
Note. If you elect to not have any
special depreciation allowance apply,
the property placed in service during the
tax year will not be subject to an AMT
adjustment for depreciation.
Recapture. When you dispose of
property for which you claimed a special
depreciation allowance, any gain on the
disposition is generally recaptured
(included in income) as ordinary income
up to the amount of the depreciation
previously allowed or allowable for the
property, including the special
depreciation allowance. For more
information, see MACRS recapture,
later. If qualified GO Zone property
(including specified GO Zone property)
ceases to be qualified GO Zone
property, if qualified Recovery
Assistance property ceases to be
qualified Recovery Assistance property,
if qualified cellulosic biomass ethanol
plant property ceases to be qualified
cellulosic biomass ethanol plant
property, if qualified second generation
biofuel plant property ceases to be
qualified second generation biofuel
plant property, or if qualified disaster
assistance property ceases to be
qualified disaster assistance property in
any year after the year you claim the
special depreciation allowance, the
excess benefit you received from
claiming the special depreciation
allowance must be recaptured as
ordinary income. For information on
depreciation recapture, see Pub. 946.
Also, see Notice 2008-25, 2008-9 I.R.B.
484, available at www.irs.gov/irb/
2008-09_IRB/ar10.html for additional
guidance on recapture of qualified GO
Zone property.

Line 15

Report on this line depreciation for
property that you elect to depreciate
under the unit-of-production method or
any other method not based on a term
of years (other than the

retirement-replacement-betterment
method).
Attach a separate sheet showing:

• A description of the property and the

depreciation method you elect that
excludes the property from MACRS or
the Accelerated Cost Recovery System
(ACRS); and
• The depreciable basis (cost or other
basis reduced, if applicable, by salvage
value, any section 179 expense
deduction, deduction for removal of
barriers to the disabled and the elderly,
disabled access credit, enhanced oil
recovery credit, credit for
employer-provided childcare facilities
and services, any special depreciation
allowance, and any other applicable
deduction or credit).
For additional credits and deductions
that may affect the depreciable basis,
see section 1016. Also, see section
50(c) to determine the basis adjustment
for investment credit property.

Line 16

Enter the total depreciation you are
claiming for the following types of
property (except listed property and
property subject to a section 168(f)(1)
election).
• ACRS property (pre-1987 rules). See
Pub. 534.
• Property placed in service before
1981.
• Certain public utility property which
does not meet certain normalization
requirements.
• Certain property acquired from
related persons.
• Property acquired in certain
nonrecognition transactions.
• Certain sound recordings, movies,
and videotapes.
• Property depreciated under the
income forecast method. The use of the
income forecast method is limited to
motion picture films, videotapes, sound
recordings, copyrights, books, and
patents.

the Look-Back Method for Property
Depreciated Under the Income Forecast
Method.
For property placed in service in the
current tax year, you can either include
certain participations and residuals in
the adjusted basis of the property or
deduct these amounts when paid. See
section 167(g)(7). You cannot use this
method to depreciate any amortizable
section 197 intangible. For more details,
see the instructions on section 197
intangibles, later.
• Intangible property, other than
section 197 intangibles, including:
1. Computer software. Use the
straight line method over 36 months. A
longer period may apply to software
leased under a lease agreement
entered into after March 12, 2004, to a
tax-exempt organization, governmental
unit, or foreign person or entity (other
than a partnership). See section 167(f)
(1)(C).
If you elect the section 179
expense deduction or take the
CAUTION special depreciation allowance
for qualified computer software, you
must reduce the amount on which you
figure your regular depreciation
deduction by the amount deducted.

!

2. Any right to receive tangible
property or services under a contract or
granted by a governmental unit (not
acquired as part of a business).
3. Any interest in a patent or
copyright not acquired as part of a
business.
4. Residential mortgage servicing
rights. Use the straight line method over
108 months.
5. Other intangible assets with a
limited useful life that cannot be
estimated with reasonable accuracy.
Generally, use the straight line method
over 15 years. See Regulations section
1.167(a)-3(b) for details and exceptions.
Prior years' depreciation, plus
current year's depreciation, can
CAUTION never exceed the depreciable
basis of the property.

does not apply to films, videotapes, and
sound recordings. For more details and
exceptions, see Pub. 946.

Section A
Line 17

For tangible property placed in service
in tax years beginning before 2019 and
depreciated under MACRS (“MACRS
asset”), enter the deductions for the
current year. To figure the deductions,
see the instructions for line 19, column
(g).

Note. If you dispose of a portion of a
MACRS asset and are required to (or
elect to) take the basis of the asset into
account, you must reduce the basis and
depreciation reserve of the MACRS
asset by the basis and depreciation
reserve attributable to the disposed
portion as of the first day of the tax year
before you compute the depreciation
deduction for the current year. To figure
the depreciation deduction for the
remaining MACRS asset and the
disposed portion, see the instructions
for line 19, column (g). For more
information, see Regulations section
1.168(i)-8.

Line 18

To simplify the computation of MACRS
depreciation, you can elect to group
assets into one or more general asset
accounts. The assets in each general
asset account are depreciated as a
single asset.
Each general asset account must
include only assets that were placed in
service during the same tax year and
that have the same depreciation
method, recovery period, and
convention. However, an asset cannot
be included in a general asset account if
the asset is used both for personal
purposes and business/investment
purposes.

If you take the special
depreciation allowance for a
CAUTION qualified film, television, or live
theatrical production, you must reduce
the amount on which you figure your
regular depreciation deduction by the
amount deducted.

Part III. MACRS
Depreciation

When an asset in an account is
disposed of, the amount realized
generally must be recognized as
ordinary income. The unadjusted
depreciable basis and depreciation
reserve of the general asset account are
not affected as a result of a disposition.

If you use the income forecast
method for any property placed in
service after September 13, 1995, you
may owe interest or be entitled to a
refund for the 3rd and 10th tax years
beginning after the tax year the property
was placed in service. For details, see
Form 8866, Interest Computation Under

The term “Modified Accelerated Cost
Recovery System” (MACRS) includes
the General Depreciation System and
the Alternative Depreciation System.
Generally, MACRS is used to
depreciate any tangible property placed
in service after 1986. However, MACRS

Special rules apply to passenger
automobiles, assets generating foreign
source income, assets converted to
personal use, certain asset dispositions,
and like-kind exchanges or involuntary
conversions of property in a general
asset account. For more details, see
Regulations section 1.168(i)-1 (as in

!

!

-7-

effect for tax years beginning on or after
January 1, 2014).
To make the election, check the box
on line 18. You must make the election
on your return filed no later than the due
date (including extensions) for the tax
year in which the assets included in the
general asset account were placed in
service. Once made, the election is
irrevocable and applies to the tax year
for which the election is made and all
later tax years.
For more information on depreciating
property in a general asset account, see
Pub. 946.

Section B
Property acquired in a like-kind exchange or involuntary conversion.
Generally, you must depreciate the
carryover basis of property you acquire
in a like-kind exchange or involuntary
conversion during the current tax year
over the remaining recovery period of
the property exchanged or involuntarily
converted. Use the same depreciation
method and convention that was used
for the exchanged or involuntarily
converted property. Treat any excess
basis as newly placed in service
property. Figure depreciation separately
for the carryover basis and the excess
basis, if any.
These rules apply only to acquired
property with the same or a shorter
recovery period or the same or a more
accelerated depreciation method than
the property exchanged or involuntarily
converted. For additional rules, see
Regulations section 1.168(i)-6(c) and
Pub. 946.
Election out. Instead of using the
above rules, you can elect, for
depreciation purposes, to treat the
adjusted basis of the exchanged
property as if it was disposed of at the
time of the exchange or involuntary
conversion. Generally, treat the
carryover basis and excess basis, if
any, for the acquired property as if
placed in service on the date you
acquired it. The depreciable basis of the
new property is the adjusted basis of the
exchanged or involuntarily converted
property plus any additional amount
paid for it. See Regulations section
1.168(i)-6(i).
To make the election, figure the
depreciation deduction for the new
property in Part III. For listed property,
use Part V. Attach a statement
indicating “Election made under section
1.168(i)-6(i)” for each property involved
in the exchange or involuntary

conversion. The election must be made
separately by each person acquiring
replacement property (for example, by
the partnership, by the S corporation, or
by the common parent of a consolidated
group). The election must be made on
your timely filed return (including
extensions). Once made, the election
cannot be revoked without IRS consent.

!

CAUTION

Generally, a like-kind exchange
after December 31, 2017, is an
exchange of real property.

Lines 19a Through 19i

Use lines 19a through 19i only for
assets placed in service during the tax
year beginning in 2019 and depreciated
under the General Depreciation System
(GDS), except for automobiles and
other listed property (which are reported
in Part V).

Column (a) — Classification of property. Sort the property you acquired
and placed in service during the tax
year beginning in 2019 according to its
classification (3-year property, 5-year
property, etc.) as shown in column (a) of
lines 19a through 19i. The
classifications for some property are
shown below. For property not shown,
see Determining the classification, later.
3-year property includes:
• A race horse that is more than 2
years old at the time it is placed in
service before January 1, 2009.
Note. Any race horse placed in service
after December 31, 2008, and before
January 1, 2021, is treated as 3-year
property (regardless of the age of the
race horse).
• Any horse (other than a race horse)
that is more than 12 years old at the
time it is placed in service.
• Any qualified rent-to-own property (as
defined in section 168(i)(14)).
5-year property includes:
• Automobiles.
• Light general purpose trucks.
• Typewriters, calculators, copiers, and
duplicating equipment.
• Any semi-conductor manufacturing
equipment.
• Any qualified technological
equipment.
• Any section 1245 property used in
connection with research and
experimentation.
• Certain energy property specified in
section 168(e)(3)(B)(vi).
• Appliances, carpets, furniture, etc.,
used in a rental real estate activity.
• Any new machinery or equipment
(other than any grain bin, cotton ginning
asset, fence, or other land
improvement) used in a farming
-8-

business and placed in service after
2017, in tax years ending after 2017.
The original use of the property must
begin with you after 2017.
7-year property includes:
• Office furniture and equipment.
• Railroad track.
• Any motorsports entertainment
complex (as defined in section 168(i)
(15)) placed in service before January 1,
2021.
• Any natural gas gathering line (as
defined in section 168(i)(17)) placed in
service after April 11, 2005, the original
use of which begins with you after April
11, 2005, and is not under
self-construction or subject to a binding
contract in existence before April 12,
2005. Also, no AMT adjustment is
required.
• Any used agricultural machinery and
equipment placed in service after 2017,
grain bins, cotton ginning assets, or
fences used in a farming business (but
no other land improvements).
• Any property that does not have a
class life and is not otherwise classified.
10-year property includes:
• Vessels, barges, tugs, and similar
water transportation equipment.
• Any single purpose agricultural or
horticultural structure (see section 168(i)
(13)).
• Any tree or vine bearing fruit or nuts.
• Any qualified smart electric meter
property.
• Any qualified smart electric grid
system property.
15-year property includes:
• Any municipal wastewater treatment
plant.
• Any telephone distribution plant and
comparable equipment used for 2-way
exchange of voice and data
communications.
• Any section 1250 property that is a
retail motor fuels outlet (whether or not
food or other convenience items are
sold there).
• Initial clearing and grading land
improvements for gas utility property.
• Certain electric transmission property
specified in section 168(e)(3)(E)(v)
placed in service after April 11, 2005,
the original use of which begins with you
after April 11, 2005, and is not under
self-construction or subject to a binding
contract in existence before April 12,
2005.
20-year property includes:
• Farm buildings (other than single
purpose agricultural or horticultural
structures).
• Municipal sewers not classified as
25-year property.

• Initial clearing and grading land
improvements for electric utility
transmission and distribution plants.
25-year property is water utility
property, which is:
• Property that is an integral part of the
gathering, treatment, or commercial
distribution of water that, without regard
to this classification, would be 20-year
property.
• Municipal sewers.
This classification does not apply to
property placed in service under a
binding contract in effect at all times
since June 9, 1996.
Residential rental property is a
building in which 80% or more of the
total rent is from dwelling units.
Nonresidential real property is any
real property that is neither residential
rental property nor property with a class
life of less than 27.5 years.
50-year property includes any
improvements necessary to construct or
improve a roadbed or right-of-way for
railroad track that qualifies as a railroad
grading or tunnel bore under section
168(e)(4).
There is no separate line to report
50-year property. Therefore, attach a
statement showing the same
information as required in columns (a)
through (g). Include the deduction in the
line 22 “Total” and write “See
attachment” in the bottom margin of the
form.
Determining the classification. If
your depreciable property is not listed
above, determine the classification as
follows.
1. Find the property's class life. See
the Table of Class Lives and Recovery
Periods in Pub. 946.
2. Use the following table to find the
classification in column (b) that
corresponds to the class life of the
property in column (a).
(a)
Class life (in years)
(See Pub. 946)
4 or less . . . . . . . . . .
More than 4 but less than
10 . . . . . . . . . . . . . .
10 or more but less than
16 . . . . . . . . . . . . . .
16 or more but less than
20 . . . . . . . . . . . . . .
20 or more but less than
25 . . . . . . . . . . . . . .
25 or more . . . . . . . . .

(b)
Classification
3-year property
5-year property
7-year property
10-year property
15-year property
20-year property

19i, enter the month and year you
placed the property in service. If you
converted property held for personal
use to use in a trade or business or for
the production of income, treat the
property as being placed in service on
the conversion date.
Column (c) — Basis for depreciation
(business/investment use only). To
find the basis for depreciation, multiply
the cost or other basis of the property by
the percentage of business/investment
use. From that result, subtract any
credits and deductions allocable to the
property. The following are examples of
some credits and deductions that
reduce the basis for depreciation.
• Section 179 expense deduction.
• Deduction for removal of barriers to
the disabled and the elderly.
• Disabled access credit.
• Enhanced oil recovery credit.
• Credit for alternative fuel vehicle
refueling property.
• Credit for employer-provided
childcare facilities and services.
• Any special depreciation allowance
included on line 14.
• Any basis adjustment for investment
credit property. See section 50(c).
For additional credits and deductions
that affect the depreciable basis, see
section 1016 and Pub. 946.
Column (d) — Recovery period.
Determine the recovery period from the
following table. See Pub. 946 for more
information on the recovery period for
MACRS property.

Recovery Period for Most
Property
Classification
3-year property . . . . . . . .
5-year property . . . . . . . .
7-year property . . . . . . . .
10-year property . . . . . . .
15-year property . . . . . . .
20-year property . . . . . . .
25-year property . . . . . . .
Residential rental
property . . . . . . . . . . . .
Nonresidential real
property . . . . . . . . . . . .
Railroad gradings and tunnel
bores . . . . . . . . . . . . . .

Recovery
period
3 yrs.
5 yrs.
7 yrs.
10 yrs.
15 yrs.
20 yrs.
25 yrs.
27.5 yrs.
39 yrs.
50 yrs.

Indian reservation property. For
qualified Indian reservation property
placed in service before January 1,
2021, the following shorter recovery
periods apply.

Recovery Period for Qualified
Indian Reservation Property
Property class
3-year property . .
5-year property . .
7-year property . .
10-year property .
15-year property .
20-year property .
Nonresidential real
property . . . . . .

. . . . . .

Recovery
period
2 yrs.
3 yrs.
4 yrs.
6 yrs.
9 yrs.
12 yrs.

. . . . . .

22 yrs.

. . . . . .
. . . . . .
. . . . . .
. . . . . .
. . . . . .

For example, figure depreciation on
5-year property acquired during the tax
year that is qualified Indian reservation
property in the same manner as
depreciation is figured for 3-year
property that is not qualified Indian
reservation property. Report the
depreciation on line 19b, entering “3
yrs.” as the recovery period in column
(d). For more information, including the
definition of qualified property, see Pub.
946.
Note. You can elect, for any class of
qualified Indian reservation property, to
not accelerate depreciation for all such
property in such class placed in service
during the tax year.
To make this election, attach a
statement to your timely filed return
(including extensions) indicating the
class of property for which you are
making the election and that, for such
class, you are electing not to apply
section 168(j). Once made, the election
is irrevocable.
Column (e) — Convention. The
applicable convention determines the
portion of the tax year for which
depreciation is allowable during a year
property is either placed in service or
disposed of. There are three types of
conventions. To select the correct
convention, you must know the type of
property and when you placed the
property in service.
Half-year convention. This
convention applies to all property
reported on lines 19a through 19g,
unless the mid-quarter convention
applies. It does not apply to residential
rental property, nonresidential real
property, and railroad gradings and
tunnel bores. It treats all property placed
in service (or disposed of) during any
tax year as placed in service (or
disposed of) on the midpoint of that tax
year. Enter “HY” in column (e).
Mid-quarter convention. If the total
depreciable bases (before any special

Column (b) — Month and year
placed in service. For lines 19h and
-9-

depreciation allowance) of MACRS
property placed in service during the
last 3 months of your tax year exceed
40% of the total depreciable bases of
MACRS property placed in service
during the entire tax year, the
mid-quarter, instead of the half-year,
convention generally applies.
In determining whether the
mid-quarter convention applies, do not
take into account the following.
• Property that is being depreciated
under a method other than MACRS.
• Any residential rental property,
nonresidential real property, or railroad
gradings and tunnel bores.
• Property that is placed in service and
disposed of within the same tax year.
The mid-quarter convention treats all
property placed in service (or disposed
of) during any quarter as placed in
service (or disposed of) on the midpoint
of that quarter. However, no
depreciation is allowed under this
convention for property that is placed in
service and disposed of within the same
tax year. Enter “MQ” in column (e).
Mid-month convention. This
convention applies only to residential
rental property (line 19h), nonresidential
real property (line 19i), and railroad
gradings and tunnel bores. It treats all
property placed in service (or disposed
of) during any month as placed in
service (or disposed of) on the midpoint
of that month. Enter “MM” in column (e).
Column (f) — Method. Applicable
depreciation methods are prescribed for
each classification of property as
follows. However, you can make an
irrevocable election to use the straight
line method for all property within a
classification that is placed in service
during the tax year. Enter “200 DB” for
200% declining balance, “150 DB” for
150% declining balance, or “S/L” for
straight line.
• 3-, 5-, 7-, and 10-year property.
Generally, the applicable method is the
200% declining balance method,
switching to the straight line method in
the first tax year that the straight line
rate exceeds the declining balance rate.
Note. The straight line method is the
only applicable method for trees and
vines bearing fruit or nuts. The 150%
declining balance method is the only
applicable method for any qualified
smart electric meter or any qualified
smart electric grid system property
placed in service after October 3, 2008.
For 3-, 5-, 7-, or 10-year property
eligible for the 200% declining balance
method, you can make an irrevocable

election to use the 150% declining
balance method, switching to the
straight line method in the first tax year
that the straight line rate exceeds the
declining balance rate. The election
applies to all property within the
classification for which it is made and
that was placed in service during the tax
year. You will not have an AMT
adjustment for any property included
under this election.
For 3-, 5-, 7-, or 10-year property
used in a farming business and placed
in service after 2017, in tax years ending
after 2017, the 150% declining balance
method is no longer required. However,
the 150% declining balance method will
continue to apply to any 15- or 20-year
property used in a farming business to
which the straight line method does not
apply or to property for which you elect
the use of the 150% declining balance
method.
• 15- and 20-year property and
property used in a farming business.
The applicable method is the 150%
declining balance method, switching to
the straight line method in the first tax
year that the straight line rate exceeds
the declining balance rate. For 3-, 5-, 7-,
and 10-year property used in a farming
business and placed in service after
2017, see 3-, 5-, 7-, or 10-year property
above.
• Water utility property, residential
rental property, nonresidential real
property, or any railroad grading or
tunnel bore. The only applicable
method is the straight line method.
Column (g) — Depreciation deduction. To figure the depreciation
deduction, you may use optional Tables
A through E, which begin later. Multiply
column (c) by the applicable rate from
the appropriate table. See Pub. 946 for
complete tables. If you disposed of the
property during the current tax year,
multiply the result by the applicable
decimal amount from the tables in Step
3, later. Or, you may compute the
deduction yourself by completing the
following steps.
Step 1. Determine the depreciation
rate as follows.
• If you are using the 200% or 150%
declining balance method in column (f),
divide the declining balance rate (use
2.00 for 200 DB or 1.50 for 150 DB) by
the number of years in the recovery
period in column (d). For example, for
property depreciated using the 200 DB
method over a recovery period of 5
years, divide 2.00 by 5 for a rate of 40%.
You must switch to the straight line rate
-10-

in the first year that the straight line rate
exceeds the declining balance rate.
• If you are using the straight line
method, divide 1.00 by the remaining
number of years in the recovery period
as of the beginning of the tax year (but
not less than one). For example, if there
are 61/2 years remaining in the recovery
period as of the beginning of the year,
divide 1.00 by 6.5 for a rate of 15.38%.
Step 2. Multiply the percentage rate
determined in Step 1 by the property's
unrecovered basis (basis for
depreciation (as defined in column (c))
reduced by all prior years' depreciation.
Step 3. For property placed in
service or disposed of during the current
tax year, multiply the result from Step 2
by the applicable decimal amount from
the tables below (based on the
convention shown in column (e)).
Half-year (HY) convention. . . . . . .

0.5

Mid-quarter (MQ)
convention
Placed in service Placed
(or disposed of)
in
during the:
service
1st quarter . . .
0.875
2nd quarter . .
0.625
3rd quarter . . .
0.375
4th quarter . . .
0.125

Mid-month (MM)
convention
Placed in service
(or disposed of)
during the:
1st month . . . .
2nd month . . . .
3rd month . . . .
4th month . . . .
5th month . . . .
6th month . . . .
7th month . . . .
8th month . . . .
9th month . . . .
10th month . . . .
11th month . . . .
12th month . . . .

Placed
in
service
0.9583
0.8750
0.7917
0.7083
0.6250
0.5417
0.4583
0.3750
0.2917
0.2083
0.1250
0.0417

Disposed
of
0.125
0.375
0.625
0.875

Disposed
of
0.0417
0.1250
0.2083
0.2917
0.3750
0.4583
0.5417
0.6250
0.7083
0.7917
0.8750
0.9583

Short tax years. See Pub. 946 for
rules on how to compute the
depreciation deduction for property
placed in service in a short tax year.

Section C
Lines 20a Through 20d

Complete lines 20a through 20d for
assets, other than automobiles and
other listed property, placed in service

only during the tax year beginning in
2019 and depreciated under the
Alternative Depreciation System (ADS).
Report on line 17 MACRS depreciation
on assets placed in service in prior
years.
Under ADS, use the applicable
depreciation method, the applicable
recovery period, and the applicable
convention to compute depreciation.
The following types of property must
be depreciated under ADS.
• Tangible property used
predominantly outside the United
States.
• Tax-exempt use property.
• Tax-exempt bond financed property.
• Imported property covered by an
executive order of the President of the
United States.
• Property used predominantly in a
farming business and placed in service
during any tax year in which you made
an election under section 263A(d)(3) to
not have the uniform capitalization rules
of section 263A apply.
• Any nonresidential real property,
residential rental property, or qualified
improvement property held by an
electing real property trade business (as
defined in section 163(j)(7)(B)).
• Any property that has a recovery
period of 10 years or more that is held
by an electing farming business (as
defined in section 163(j)(7)(C)).
Instead of depreciating property
under GDS (line 19), you can make an
irrevocable election for any
classification of property for any tax year
to use ADS. For residential rental and
nonresidential real property, you can
make this election separately for each
property. You make this election by
completing line 20 of Form 4562.
Column (a) — Classification of property. Use the following rules to
determine the classification of the
property under ADS.
Under ADS, the depreciation
deduction for most property is based on
the property's class life. See section
168(g)(3) for special rules for
determining the class life for certain
property. See Pub. 946 for information
on recovery periods for ADS and the
Table of Class Lives and Recovery
Periods.
Use line 20a for all property
depreciated under ADS, except
property that does not have a class life,
residential rental and nonresidential real
property, water utility property, and
railroad gradings and tunnel bores. Use
line 20b for property that does not have

a class life. Use line 20c for residential
rental property. Use line 20d for
nonresidential real property.
Residential rental property. The
ADS recovery period for residential
rental property placed in service after
2017 is 30 years. Report depreciation
for these assets on line 20c. For more
information, see Pub. 946.
Water utility property and railroad
gradings and tunnel bores. These
assets are 50-year property under ADS.
There is no separate line to report
50-year property. Therefore, attach a
statement showing the same
information required in columns (a)
through (g). Include the deduction in the
line 22 “Total” and write “See
attachment” in the bottom margin of the
form.
Column (b) — Month and year
placed in service. For residential
rental property and 40-year property,
enter the month and year placed in
service or converted to use in a trade or
business or for the production of
income.
Column (c) — Basis for depreciation
(business/investment use only). See
the instructions for line 19, column (c).
Column (d) — Recovery period. On
line 20a, enter the property's class life.
Column (e) — Convention. Under
ADS, the applicable conventions are the
same as those used under GDS. See
the instructions for line 19, column (e).
Column (g) — Depreciation deduction. Figure the depreciation deduction
in the same manner as under GDS,
except use the straight line method over
the ADS recovery period and use the
applicable convention.
MACRS recapture. If you later dispose
of property you depreciated using
MACRS, any gain on the disposition is
generally recaptured (included in
income) as ordinary income up to the
amount of the depreciation previously
allowed or allowable for the property.
Depreciation, for this purpose, includes
any of the following amounts taken
during the 2019 tax year.
• Any section 179 expense deduction
claimed on the property.
• Any special depreciation allowance
available for the property (unless you
elected not to claim it).
• Any deduction under section 179B for
capital costs incurred in complying with
Environmental Protection Agency sulfur
regulations.

-11-

There is no recapture for residential
rental and nonresidential real property,
unless that property is qualified property
for which you claimed a special
depreciation allowance (discussed
earlier). For more information on
depreciation recapture, see Pub. 946.

Part IV. Summary
Line 22

A partnership (other than an electing
large partnership) or S corporation does
not include any section 179 expense
deduction (line 12) on this line. Instead,
any section 179 expense deduction is
passed through separately to the
partners and shareholders on the
appropriate line of their Schedules K-1.

Line 23

If you are subject to the uniform
capitalization rules of section 263A,
enter the increase in basis from costs
you must capitalize. For a detailed
discussion of who is subject to these
rules, which costs must be capitalized,
and allocation of costs among activities,
see Regulations section 1.263A-1.

Part V. Listed Property
If you claim the standard mileage
rate, actual vehicle expenses (including
depreciation), or depreciation on other
listed property, you must provide the
information requested in Part V,
regardless of the tax year the property
was placed in service. However, if you
file Form 2106, report this information
on that form and not in Part V. Also, if
you file Schedule C (Form 1040 or
1040-SR) and are claiming the standard
mileage rate or actual vehicle expenses
(except depreciation), and you are not
required to file Form 4562 for any other
reason, report vehicle information in
Part IV of Schedule C and not on Form
4562.

Section A
The section 179 expense
deduction should be computed
CAUTION before calculating any special
depreciation allowance and/or regular
depreciation deduction. See the
instructions for line 26, column (i).

!

Listed property used 50% or less in a
qualified business use (as defined in the
instructions for lines 26 and 27 below)
does not qualify for the section 179
expense deduction or special
depreciation allowance.

Line 25

If you placed in service certain qualified
listed property during the tax year, you
may be able to deduct the special
depreciation allowance. This property
includes certain qualified property
acquired before September 28, 2017,
and placed in service before January 1,
2020 (before January 1, 2021, for
certain aircraft) and certain qualified
property acquired after September 27,
2017, and placed in service before
January 1, 2027 (before January 1,
2028, for certain aircraft). See the
instructions for line 14 for the definition
of qualified property and how to figure
the deduction. This special depreciation
allowance is included in the overall limit
on depreciation and section 179
expense deduction for passenger
automobiles. See the tables for
limitations on passenger vehicles and
trucks and vans, later. Enter on line 25
your total special depreciation
allowance for all qualified listed
property.

Lines 26 and 27

Use line 26 to figure depreciation for
property used more than 50% in a
qualified business use. Use line 27 to
figure the depreciation for property used
50% or less in a qualified business use.
Also, see Limits for passenger
automobiles, later.

If you acquired the property
through a trade-in, special rules
CAUTION apply for determining the basis,
recovery period, depreciation method,
and convention. For more details, see
Property acquired in a like-kind
exchange or involuntary conversion,
earlier. Also, see Regulations section
1.168(i)-6(d)(3).

!

Qualified business use. To determine
whether to use line 26 or line 27 to
report your listed property, you must first
determine the percentage of qualified
business use for each property.
Generally, a qualified business use is
any use in your trade or business.
However, it does not include any of the
following.
• Investment use.
• Leasing the property to a 5% owner
or related person.
• The use of the property as
compensation for services performed by
a 5% owner or related person.
• The use of the property as
compensation for services performed by
any person (who is not a 5% owner or
related person), unless an amount is
included in that person's income for the
use of the property and, if required,

income tax was withheld on that
amount.
Excluding these uses above from the
numerator, determine your percentage
of qualified business use similar to the
method used to figure the business/
investment use percentage in column
(c). Your percentage of qualified
business use may be smaller than the
business/investment use percentage.
For more information, including the
definition of a 5% owner and related
person and exceptions, see Pub. 946.
Listed property recapture. If you
used listed property more than 50% in a
qualified business use in the year you
placed the property in service, and used
it 50% or less in a later year, you may
have to include as income part of the
depreciation, including the special
depreciation allowance, deducted in
prior years. Use Form 4797, Sales of
Business Property, to figure the
recapture amount.
Column (a) — Type of property. List
on a property-by-property basis all your
listed property in the following order.
1. Automobiles and other vehicles.
2. Other listed property (computers
and peripheral equipment placed in
service before 2018, etc.).
In column (a), list the make and
model of automobiles, and give a
general description of other listed
property.
If you have more than five vehicles
used 100% for business/investment
purposes, you may group them by tax
year. Otherwise, list each vehicle
separately.
Column (b) — Date placed in service. Enter the date the property was
placed in service. If property held for
personal use is converted to business/
investment use, treat the property as
placed in service on the date of
conversion.
Column (c) — Business/investment
use percentage. Enter the percentage
of business/investment use. For
automobiles and other vehicles,
determine this percentage by dividing
the number of miles the vehicle is driven
for trade or business purposes or for the
production of income during the year
(not to include any commuting mileage)
by the total number of miles the vehicle
is driven for all purposes. Treat vehicles
used by employees as being used
100% for business/investment purposes
if the value of personal use is included
in the employees' gross income, or the
-12-

employees reimburse the employer for
the personal use. For more information,
see Pub. 463.
For other listed property (such as
computers placed in service before
2018 or video equipment), allocate the
use based on the most appropriate unit
of time the property is actually used
(rather than merely being available for
use).
If during the tax year you convert
property used solely for personal
purposes to business/investment use
(or vice versa), figure the percentage of
business/investment use only for the
number of months you use the property
in your business or for the production of
income. Multiply that percentage by the
number of months you use the property
in your business or for the production of
income, and divide the result by 12.
Column (d) — Cost or other basis.
Enter the property's actual cost
(including sales tax) or other basis
(unadjusted for prior years'
depreciation). If you traded in old
property, see Property acquired in a
like-kind exchange or involuntary
conversion, earlier.
For a vehicle, reduce your basis by
any qualified electric vehicle credit you
claimed for property placed in service
before January 1, 2007, or by any
alternative motor vehicle credit allowed.
If you converted the property from
personal use to business/investment
use, your basis for depreciation is the
smaller of the property's adjusted basis
or its fair market value on the date of
conversion.
Column (e) — Basis for depreciation
(business/investment use only).
Multiply column (d) by the percentage in
column (c). From that result, subtract
any section 179 expense deduction, any
special depreciation allowance, any
credit for employer-provided childcare
facilities and services, and half of any
investment credit taken before 1986
(unless you claimed the reduced credit).
For automobiles and other listed
property placed in service after 1985
(that is, transition property), reduce the
depreciable basis by the entire
investment credit.
Column (f) — Recovery period. Enter
the recovery period. For property placed
in service after 1986 and used more
than 50% in a qualified business use,
use the table in the instructions for
line 19, column (d). For property placed
in service after 1986 and used 50% or
less in a qualified business use,
depreciate the property using the

straight line method over its ADS
recovery period. The ADS recovery
period is 5 years for automobiles and
computers.
Column (g) — Method/convention.
Enter the method and convention used
to figure your depreciation deduction.
See the instructions for line 19, columns
(e) and (f). Write “200 DB,” “150 DB,” or
“S/L” for the depreciation method, and
“HY,” “MM,” or “MQ” for half-year,
mid-month, or mid-quarter conventions,
respectively. For property placed in
service before 1987, write “PRE” if you
used the prescribed percentages under
ACRS. If you elected an alternate
percentage or if you are required to
depreciate the property using the
straight line method, enter “S/L.”
Column (h) — Depreciation deduction. See Limits for passenger
automobiles, later, before entering an
amount in column (h).
For property used more than 50% in
a qualified business use (line 26) and
placed in service after 1986, figure
column (h) by following the instructions
for line 19, column (g). If placed in
service before 1987, multiply column (e)
by the applicable percentage given in
Pub. 534 for ACRS property. If the
recovery period for an automobile
ended before your tax year beginning in
2019, enter your unrecovered basis, if
any, in column (h).
For property used 50% or less in a
qualified business use (line 27) and
placed in service after 1986, figure
column (h) by dividing the amount in
column (e) by the amount in column (f).
Use the same conventions as discussed
in the instructions for line 19, column
(e). The amount in column (h) cannot
exceed the property's unrecovered
basis. If the recovery period for an
automobile ended before your tax year
beginning in 2019, enter your
unrecovered basis, if any, in column (h).
For property placed in service before
1987 that was disposed of during the
year, enter zero.
Limits for passenger automobiles.
The depreciation deduction, including
the section 179 expense deduction and
special depreciation allowance, for
passenger automobiles is limited. For
any passenger automobile (including an
electric passenger automobile) you list
on line 26 or line 27, the total of columns
(h) and (i) on line 26 or 27 and column
(h) on line 25 for that automobile cannot
exceed the applicable limit shown in
Table 1, 2, 3, or 4. If the business/
investment use percentage in column

(c) for the automobile is less than 100%,
you must reduce the applicable limit to
an amount equal to the limit multiplied
by that percentage. For example, for an
automobile (including a truck or van)
placed in service in 2019 (for which you
elect not to claim any special
depreciation allowance that is used 60%
for business/investment, the limit is
$6,060 ($10,100 x 60% (0.60)).
For purposes of the limits for
passenger automobiles, the following
apply.
• Passenger automobiles are
4-wheeled vehicles manufactured
primarily for use on public roads that are
rated at 6,000 pounds unloaded gross
vehicle weight or less (for a truck or van,
gross vehicle weight is substituted for
unloaded gross vehicle weight).
• Electric passenger automobiles are
vehicles produced by an original
equipment manufacturer and designed
to run primarily on electricity, placed in
service after August 5, 1997, and before
January 1, 2007.
Exception. The following vehicles
are not considered passenger
automobiles.
• An ambulance, hearse, or
combination ambulance-hearse used in
your trade or business.
• A vehicle used in your trade or
business of transporting persons or
property for compensation or hire.
• Any truck or van placed in service
after July 6, 2003, that is a qualified
nonpersonal use vehicle. A truck or van
is a qualified nonpersonal use vehicle
only if it has been specially modified
with the result that it is not likely to be
used more than a de minimis amount for
personal purposes. For example, a van
that has only a front bench for seating,
in which permanent shelving has been
installed, that constantly carries
merchandise or equipment, and that
has been specially painted with
advertising or the company's name, is a
vehicle not likely to be used more than a
de minimis amount for personal
purposes.
Exception for leasehold property.
The business use requirement and the
limits for passenger automobiles
generally do not apply to passenger
automobiles leased or held by anyone
regularly engaged in the business of
leasing passenger automobiles.
For a detailed discussion on
passenger automobiles, including
leased automobiles, see Pub. 463.

-13-

Table 1—Limits for Passenger
Automobiles (including trucks and
vans) Acquired Before September
28, 2017, and Placed in Service in
2019
AND the
number of tax
years in which
this
automobile
has been
in service is:

THEN the
limit on your
depreciation
and section
179 expense
deduction is:

Jan. 1–Dec. 31,
2018

2

$16,000

3

$9,600

Jan. 1–Dec. 31,
2019

1

$10,100*

2

$16,100

IF you placed
your
automobile in
service:

*If you take the special depreciation allowance for
qualified passenger automobiles acquired before
September 28, 2017, and placed in service in 2019, the
limit is $14,900.

Table 2—Limits for Passenger
Automobiles (including trucks and
vans) Acquired After September
27, 2017, and Placed in Service in
2019
AND the
number of
tax years in
which this
automobile
has been in
service is:

THEN the
limit on your
depreciation
and section
179 expense
deduction is:

Jan. 1–Dec. 31,
2018

2

 $16,000

3

$9,600

Jan. 1–Dec. 31,
2019

1

 $10,100*

2

$16,100

IF you placed
your automobile
in service:

*If you take the special depreciation allowance for
qualified passenger automobiles acquired after
September 27, 2017, and placed in service in 2019, the
limit is $18,100.

Table 3—Limits for Passenger
Automobiles Placed in Service
After 2003 and Before 2018
(excluding trucks and vans placed in
service after 2002 and electric
passenger automobiles placed in
service before January 1, 2007)

IF you placed
your automobile
in service:

AND the
number of
tax years in
which this
automobile
has been in
service is:

Jan. 1, 2004–Dec.
31, 2005

4 or more

Jan. 1, 2006–Dec.
31, 2011

4 or more

Jan. 1, 2012–Dec.
31, 2016
Jan. 1–Dec. 31,
2017

THEN the
limit on your
depreciation
and section
179 expense
deduction is:
$1,675
$1,775

3

$3,050

4 or more

$1,875

2

$5,100

3

$3,050

Table 4—Limits for Trucks and
Vans Placed in Service After 2002
and Before 2018
AND the
number of
IF you placed
tax years in
your truck or van which this
in service:
truck or van
has been in
service is:
Jan. 1, 2004–Dec.
31, 2008

THEN the
limit on your
depreciation
and section
179 expense
deduction is:

4 or more

$1,875

Jan. 1–Dec. 31,
2009

4 or more

$1,775

Jan. 1, 2010–Dec.
31, 2012

4 or more

$1,875

Jan. 1, 2013–Dec.
31, 2015

4 or more

$1,975

Jan. 1–Dec. 31,
2016

3

$3,350

4

$2,075

Jan. 1–Dec. 31,
2017

2

$5,700

3

$3,450

Column (i) — Elected section 179
cost. Enter the amount you elect to
expense for section 179 property used
more than 50% in a qualified business
use (subject to the limits for passenger
automobiles). Refer to the instructions
for Part I to determine if the property
qualifies under section 179.
You cannot elect to expense more
than $25,500 of the cost of any sport
utility vehicle (SUV) and certain other
vehicles placed in service during the tax
year. This rule applies to any 4-wheeled
vehicle primarily designed or used to

carry passengers over public streets,
roads, or highways, that is rated at more
than 6,000 pounds gross vehicle weight
and not more than 14,000 pounds gross
vehicle weight. However, the $25,500
limit does not apply to any vehicle:
• Designed to seat more than nine
persons behind the driver's seat;
• Equipped with a cargo area (either
open or enclosed by a cap) of at least
six feet in interior length that is not
readily accessible directly from the
passenger compartment; or
• That has an integral enclosure fully
enclosing the driver compartment and
load carrying device, does not have
seating rearward of the driver's seat,
and has no body section protruding
more than 30 inches ahead of the
leading edge of the windshield.
Recapture of section 179 expense
deduction. If you used listed property
more than 50% in a qualified business
use in the year you placed the property
in service and used it 50% or less in a
later year, you may have to recapture in
the later year part of the section 179
expense deduction. Use Form 4797 to
figure the recapture amount.

Section B

Except as noted below, you must
complete lines 30 through 36 for each
vehicle identified in Section A.
Employees must provide their
employers with the information
requested on lines 30 through 36 for
each automobile or vehicle provided for
their use.

Exception. Employers are not required
to complete lines 30 through 36 for
vehicles used by employees who are
not more than 5% owners or related
persons and for which the question on
line 37, 38, 39, 40, or 41 is answered
“Yes.”

Section C

Employers providing vehicles to their
employees satisfy the employer's
substantiation requirements under
section 274(d) by maintaining a written
policy statement that:
• Prohibits personal use including
commuting, or
• Prohibits personal use except for
commuting.
An employee does not need to keep
a separate set of records for any vehicle
that satisfies these written policy
statement rules.
For both written policy statements,
there must be evidence that would
enable the IRS to determine whether
-14-

use of the vehicle meets the conditions
stated below.

Line 37

A policy statement that prohibits
personal use (including commuting)
must meet all of the following
conditions.
• The employer owns or leases the
vehicle and provides it to one or more
employees for use in the employer's
trade or business.
• When the vehicle is not used in the
employer's trade or business, it is kept
on the employer's business premises,
unless it is temporarily located
elsewhere (for example, for
maintenance or because of a
mechanical failure).
• No employee using the vehicle lives
at the employer's business premises.
• No employee may use the vehicle for
personal purposes, other than de
minimis personal use (for example, a
stop for lunch between two business
deliveries).
• Except for de minimis use, the
employer reasonably believes that no
employee uses the vehicle for any
personal purpose.

Line 38

A policy statement that prohibits
personal use (except for commuting) is
not available if the commuting employee
is an officer, director, or 1% or more
owner. This policy must meet all of the
following conditions.
• The employer owns or leases the
vehicle and provides it to one or more
employees for use in the employer's
trade or business, and it is used in the
employer's trade or business.
• For bona fide noncompensatory
business reasons, the employer
requires the employee to commute to
and/or from work in the vehicle.
• The employer establishes a written
policy under which the employee may
not use the vehicle for personal
purposes, other than commuting or de
minimis personal use (for example, a
stop for a personal errand between a
business delivery and the employee's
home).
• Except for de minimis use, the
employer reasonably believes that the
employee does not use the vehicle for
any personal purpose other than
commuting.
• The employer accounts for the
commuting use by including an
appropriate amount in the employee's
gross income.

Line 40

An employer that provides more than
five vehicles to its employees who are
not 5% owners or related persons need
not complete Section B for such
vehicles. Instead, the employer must
obtain the information from its
employees and retain the information
received.

Line 41

An automobile meets the requirements
for qualified demonstration use if the
employer maintains a written policy
statement that:
• Prohibits its use by individuals other
than full-time automobile salespersons,
• Prohibits its use for personal vacation
trips,
• Prohibits storage of personal
possessions in the automobile, and
• Limits the total mileage outside the
salesperson's normal working hours.

Part VI. Amortization
Each year, you can deduct part of
certain capital costs over a fixed period.
If you amortize property, the
part you amortize does not
CAUTION qualify for the section 179
expense deduction or for depreciation.

!

Attach any information the Code and
regulations may require to make a valid
election. See the applicable Code
section, regulations, and Pub. 535 for
more information.

Line 42

Complete line 42 only for those costs
you amortize for which the amortization
period begins during your tax year
beginning in 2019.

Column (a) — Description of costs.
Describe the costs you are amortizing.
You can amortize the following.
Geological and geophysical
expenditures (section 167(h)). You
must amortize geological and
geophysical expenses paid or incurred
in connection with the exploration or
development of oil and gas within the
United States ratably over a 24-month
period. For a major integrated oil
company (as defined in section 167(h)
(5)), the costs paid or incurred after
December 19, 2007, must be amortized
ratably over a 7-year period (a 5-year
period for costs paid or incurred after
May 17, 2006, and before December
20, 2007), beginning on the mid-point of
the tax year in which the expenses were
paid or incurred.

Pollution control facilities
(section 169). You can elect to
amortize the cost of a certified pollution
control facility over a 60-month period
(84 months for certain atmospheric
pollution control facilities placed in
service after April 11, 2005). See
section 169 and the related regulations
for details and information required in
making the election. See Pub. 535 for
more information.
You can deduct a special
depreciation allowance on a
CAUTION certified pollution control facility
that is qualified property. However, you
must reduce the amount on which you
figure your amortization deduction by
any special depreciation allowance
allowed or allowable, whichever is
greater.

!

Also, a corporation must reduce its
amortizable basis of a pollution control
facility by 20% before figuring the
amortization deduction.
Bond premium (section 171). For
individuals reporting amortization of
bond premium for taxable bonds
acquired before October 23, 1986, do
not report the deduction here. See the
instructions for Schedule A (Form 1040
or 1040-SR), line 16.
For taxpayers (other than
corporations) claiming a deduction for
amortization of bond premium for
taxable bonds acquired after October
22, 1986, but before January 1, 1988,
the deduction is treated as interest
expense and is subject to the
investment interest limitations. Use
Form 4952, Investment Interest
Expense Deduction, to compute the
allowable deduction.
For taxable bonds acquired after
1987, you can elect to amortize the
bond premium over the life of the bond.
In general, you amortize bond premium
on a bond by offsetting the stated
interest allocable to a taxable year with
the bond premium allocable to that
taxable year and report the net amount
of stated interest on your return. See
section 171 and Regulations sections
1.171-1 through 1.171-5 for more
information. Individuals, also see Pub.
550, Investment Income and Expenses.
A bond premium carryforward as of the
end of a taxpayer’s final accrual period
is treated as a deduction. See
Regulations section 1.171-2(a)(4)(i)(C).
For an individual, do not report the
deduction here. See the instructions for
Schedule A (Form 1040 or 1040-SR),
line 16.
-15-

Research and experimental
expenditures (section 174). You can
elect to either amortize your research
and experimental costs, deduct them as
current business expenses, or write
them off over a 10-year period. If you
elect to amortize these costs, deduct
them in equal amounts over 60 months
or more. For more information, see Pub.
535.
The cost of acquiring a lease
(section 178). Amortize these costs
over the term of the lease. For more
information, see Pub. 535.
Qualified forestation and
reforestation costs (section 194).
You can elect to deduct a limited
amount of qualifying reforestation costs
paid or incurred during the tax year for
each qualified timber property. You can
elect to amortize the qualifying costs
that are not deducted currently over an
84-month period. There is no limit on the
amount of your amortization deduction
for reforestation costs paid or incurred
during the tax year.
If you are otherwise required to file
Form T (Timber), Forest Activities
Schedule, you can make the election to
amortize qualifying reforestation costs
by completing Part IV of the form. See
the Instructions for Form T (Timber) for
more information.
See Pub. 535 for more information on
amortizing reforestation costs.
Partnerships and S corporations, also
see the instructions for line 44.
Optional write-off of certain tax
preferences over the period
specified in section 59(e). You can
elect to amortize certain tax preference
items over an optional period. If you
make this election, there is no AMT
adjustment for these expenditures. The
applicable expenditures and the
optional recovery periods are as follows.
• Circulation expenditures (section
173) — 3 years.
• Intangible drilling and development
costs (section 263(c)) — 60 months.
• Research and experimental
expenditures (section 174(a)), mining
exploration and development costs
(sections 616(a) and 617(a)) — 10
years.
For information on making the
election, see Regulations section
1.59-1. Also, see Pub. 535.
Certain section 197 intangibles.
The following costs must be amortized
over 15 years (180 months) starting with
the later of (a) the month the intangibles
were acquired, or (b) the month the

trade or business or activity engaged in
for the production of income begins.
• Goodwill.
• Going concern value.
• Workforce in place.
• Business books and records,
operating systems, or any other
information base.
• A patent, copyright, formula, process,
design, pattern, know-how, format, or
similar item.
• A customer-based intangible (for
example, composition of market or
market share).
• A supplier-based intangible.
• A license, permit, or other right
granted by a governmental unit.
• A covenant not to compete entered
into in connection with the acquisition of
a business.
• A franchise, trademark, or trade
name (including renewals).
A longer period may apply to section
197 intangibles leased under a lease
agreement entered into after March 12,
2004, to a tax-exempt organization,
governmental unit, or foreign person or
entity (other than a partnership). See
section 197(f)(10).
A section 197 intangible is
treated as depreciable property
CAUTION used in your trade or business.
When you dispose of a section 197
intangible, any gain on the disposition,
up to the amount of allowable
amortization, is recaptured as ordinary
income. If multiple section 197
intangibles are disposed of in a single
transaction or a series of related
transactions, calculate the recapture as
if all of the section 197 intangibles were
a single asset. This rule does not apply
to section 197 intangibles disposed of
for which the adjusted basis exceeds
the fair market value.

!

For more details on section 197
intangibles, see Pub. 535.
Start-up and organizational costs.
You can elect to amortize the following
costs for setting up your business.
• Business start-up costs (section 195).
• Organizational costs for a corporation
(section 248).
• Organizational costs for a partnership
(section 709).
For business start-up and
organizational costs paid or incurred
after September 8, 2008, you can elect
to deduct a limited amount of start-up or
organizational costs for the year that
your business begins. You are not
required to attach a statement to make
this election. Once made, the election is
irrevocable. Any cost not deducted

currently must be amortized ratably over
a 180-month period. The amortization
period starts with the month you begin
business operations. See Regulations
sections 1.195-1, 1.248-1, and 1.709-1.
For business start-up and
organizational costs paid or incurred
after October 22, 2004, and before
September 9, 2008, you can elect to
deduct a limited amount of start-up and
organizational costs for the year that
your business begins. If the election is
made, you must attach any statement
required by Regulations sections
1.195-1(b), 1.248-1(c), and 1.709-1(c),
as in effect before September 9, 2008.
Any costs not deducted currently can be
amortized ratably over a 180-month
period, beginning with the month you
begin business.
Note. You can apply the provisions of
Regulations sections 1.195-1, 1.248-1,
and 1.709-1 to all expenses paid or
incurred after October 22, 2004,
provided the period of limitations on
assessment has not expired for the year
of the election. Otherwise, for business
start-up and organizational costs paid or
incurred after October 22, 2004, and
before September 9, 2008, the
provisions under Regulations sections
1.195-1(b), 1.248-1(c), and 1.709-1(c),
as in effect before September 9, 2008,
will apply.
For business start-up and
organizational costs paid or incurred
before October 23, 2004, you can elect
an amortization period of 60 months or
more.
Attach any statements required by
the appropriate section and related
regulations to Form 4562 by the due
date, including extensions, of your
return for the year in which the active
trade or business begins. If you have
both start-up and organizational costs,
attach a separate statement for each
type of cost. If you timely filed your
return without making the election, you
can still make the election on an
amended return filed within 6 months of
the due date, excluding extensions, of
the return. Write “Filed pursuant to
section 301.9100-2” on the amended
return. See Pub. 535 for more details.
Creative property costs. These
are costs paid or incurred to acquire and
develop screenplays, scripts, story
outlines, motion picture production
rights to books and plays, and other
similar properties for purposes of
potential future film development,
production, and exploitation. You may
be able to amortize creative property
-16-

costs for properties not set for
production within 3 years of the first
capitalized transaction. These costs are
amortized ratably over a 15-year period
under the rules of Rev. Proc. 2004-36,
2004-24 I.R.B. 1063.
Column (b) — Date amortization begins. Enter the date the amortization
period begins under the applicable
Code section. The amortizable amount
of a pollution control facility is reduced
by any special depreciation allowance
included on line 14 for that facility.
Column (c) — Amortizable amount.
Enter the total amount you are
amortizing. See the applicable Code
section for limits on the amortizable
amount.
Column (d) — Code section. Enter
the Code section under which you
amortize the costs. For examples, see
the Code sections referenced in the
instructions for line 42, column (a),
earlier.
Column (f) — Amortization for this
year. Compute the amortization
deduction by:
1. Dividing the amount in column (c)
by the number of months over which the
costs are to be amortized and
multiplying the result by the number of
months in the amortization period
included in your tax year beginning in
2019, or
2. Multiplying the amount in column
(c) by the percentage in column (e).

Line 43

If you are reporting the amortization of
costs that began before your 2019 tax
year and you are not required to file
Form 4562 for any other reason, do not
file Form 4562. Report the amortization
directly on the “Other Deductions” or
“Other Expenses” line of your return.

Line 44

Report the total amortization, including
the allowable portion of forestation or
reforestation amortization, on the
applicable “Other Deductions” or “Other
Expenses” line of your return. For more
details, including limitations that apply,
see Pub. 535. Partnerships (other than
electing large partnerships) and S
corporations, report the amortizable
basis of any forestation or reforestation
expenses for which amortization is
elected and the year in which the
amortization begins as a separately
stated item on Schedules K and K-1
(Form 1065 or 1120-S). See the
instructions for Schedule K (Form 1065

or 1120-S) for more details on how to
report.
Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the
United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to
allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless
the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long
as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for
individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown
in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown
below.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27 hr., 44 min.
4 hr., 16 min.
4 hr., 55 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would
be happy to hear from you. See the instructions for the tax return with which this form is filed.

-17-

Table A—General Depreciation System
Method: 200% declining balance switching to straight line
Convention: Half-year
If the recovery period is:
Year

3 years

5 years

7 years

10 years

1

33.33%

20.00%

14.29%

10.00%

2

44.45%

32.00%

24.49%

18.00%

3

14.81%

19.20%

17.49%

14.40%

4

7.41%

11.52%

12.49%

11.52%

5

11.52%

8.93%

9.22%

6

5.76%

8.92%

7.37%

7

8.93%

6.55%

8

4.46%

6.55%

9

6.56%

10

6.55%

11

3.28%

Table B—General Depreciation System
Method: 150% declining balance switching to straight line
Convention: Half-year
If the recovery period is:
Year

5 years

7 years

10 years

12 years

15 years

20 years

1

15.00%

10.71%

7.50%

6.25%

5.00%

3.750%

2

25.50%

19.13%

13.88%

11.72%

9.50%

7.219%

3

17.85%

15.03%

11.79%

10.25%

8.55%

6.677%

4

16.66%

12.25%

10.02%

8.97%

7.70%

6.177%

5

16.66%

12.25%

8.74%

7.85%

6.93%

5.713%

6

8.33%

12.25%

8.74%

7.33%

6.23%

5.285%

7

12.25%

8.74%

7.33%

5.90%

4.888%

8

6.13%

8.74%

7.33%

5.90%

4.522%

9

8.74%

7.33%

5.91%

4.462%

10

8.74%

7.33%

5.90%

4.461%

11

4.37%

4.462%

7.32%

5.91%

12

7.33%

5.90%

4.461%

13

3.66%

5.91%

4.462%

14

5.90%

4.461%

15

5.91%

4.462%

16

2.95%

4.461%

17

4.462%

18

4.461%

19

4.462%

20

4.461%

21

2.231%

-18-

Table C—General Depreciation System
Method: Straight line
Convention: Mid-month
Recovery period: 27.5 years
The month in the 1st recovery year the property is placed in service:
Year
1

1

2

3

4

5

6

7

8

9

10

11

12

3.485%

3.182%

2.879%

2.576%

2.273%

1.970%

1.667%

1.364%

1.061%

0.758%

0.455%

0.152%

2–9

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

10,12,14,16,18, 20, 22, 24, 26

3.637%

3.637%

3.637%

3.637%

3.637%

3.637%

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

11,13,15,17,19, 21, 23, 25, 27

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

3.637%

3.637%

3.637%

3.637%

3.637%

3.637%

28

1.97%

2.273%

2.576%

2.879%

3.182%

3.485%

3.636%

3.636%

3.636%

3.636%

3.636%

3.636%

Table D—General Depreciation System
Method: Straight line
Convention: Mid-month
Recovery period: 31.5 years
The month in the 1st recovery year the property is placed in service:
Year
13,15,17,19, 21, 23, 25, 27, 29, 31

1

2

3

4

5

6

7

8

9

10

11

12

3.174%

3.175%

3.174%

3.175%

3.174%

3.175%

3.174%

3.175%

3.174%

3.175%

3.174%

3.175%

14,16,18, 20, 22, 24, 26, 28, 30

3.175%

3.174%

3.175%

3.174%

3.175%

3.174%

3.175%

3.174%

3.175%

3.174%

3.175%

3.174%

32

1.720%

1.984%

2.249%

2.513%

2.778%

3.042%

3.175%

3.174%

3.175%

3.174%

3.175%

3.174%

Table E—General Depreciation System
Method: Straight line
Convention: Mid-month
Recovery period: 39 years
The month in the 1st recovery year the property is placed in service:
Year

1

2

3

4

5

6

7

8

9

10

11

12

1

2.461%

2.247%

2.033%

1.819%

1.605%

1.391%

1.177%

0.963%

0.749%

0.535%

0.321%

0.107%

2–39

2.564%

2.564%

2.564%

2.564%

2.564%

2.564%

2.564%

2.564%

2.564%

2.564%

2.564%

2.564%

40

0.107%

0.321%

0.535%

0.749%

0.963%

1.177%

1.391%

1.605%

1.819%

2.033%

2.247%

2.461%

-19-

-20-

Description of Property

Date
Placed in
Service

Cost or
Other
Basis
Business/
Investment
Use %

Section 179
Special
Allowance,
and Other
Basis
Reductions
Depreciation Prior
Years

Basis for
Depreciation

Depreciation Worksheet (Keep for your records.)
Method/
Convention

Recovery
Period

Rate or
Table
%

Depreciation
Deduction

Index
A
Alternative Depreciation
System:
Basis for depreciation 11
Classification of
property 11
Conventions 11
Depreciation deduction 11
Placed in service date 11
Recovery period 11
Alternative minimum tax 3
Amortization 15
Amortizable amount 16
Amortization deduction 16
Amortization of costs from
prior year 16
Amortization of costs in
current year 15
Applicable code section 16
Certain bond premiums 15
Cost of acquiring a
lease 15
Creative property costs 16
Date amortization
begins 16
Description of costs 15
Forestation and
reforestation costs 15
Geological and geophysical
expenditures 15
Optional section 59(e)
write-off 15
Pollution control
facilities 15
Research and experimental
expenditures 15
Section 197 intangibles 15
Start-up and organizational
costs 16
C
Conventions:
Half-year 9
Mid-month 10
Mid-quarter 9

D
Definitions 1
Amortization 2
Commuting 2
Depreciation 1
Listed property 2
Listed property Exceptions 2
Section 179 property 2
Depreciation:
Accelerated Cost Recovery
System (ACRS) 7
Assets placed in service in
prior year 7
General asset accounts 7
Income forecast method 7
Intangible property 7
Listed property 11
Modified Accelerated Cost
Recovery System
(MACRS) 7
Alternative Depreciation
System 10
General Depreciation
System 8
Involuntary
conversion 8
Like-kind exchange 8
Other 7
Depreciation methods:
Declining balance 10
Straight line 10
Depreciation tables 18, 19
Depreciation worksheet 20
E
Election out:
Involuntary conversion 8
Like-kind exchange 8
Special depreciation
allowance 6

Classification of property 8
Conventions 9
Depreciation deduction 10
Determining the
classification 9
Placed in service date 9
Recovery period 9
I
Involuntary conversion 8
L
Like-kind exchange 8
Listed property:
Basis for depreciation 12
Convention 13
Cost or other basis 12
Depreciation deduction 13
Information on vehicle
use 14
Method 13
Passenger automobile
limits 13
Definitions 13
Exception 13
Leasehold property
exception 13
Tables 13
Percentage of business or
investment use 12
Placed in service date 12
Qualified business use 12
Questions for employers on
vehicle use 14
Recapture of section 179
expense deduction 14
Recovery period 12
Section 179 expense
deduction 14
Special depreciation
allowance 12
Type of property 12

G
General Depreciation System:
Basis for depreciation 9

-21-

R
Recapture:
Listed property 12, 14
MACRS depreciation 11
Section 179 expense
deduction 3, 14
Special depreciation
allowance 6
Recordkeeping 3
S
Section 179 expense
deduction 3
Carryover of disallowed
deduction 4
Election 3
Limitations:
Maximum deduction 3
Sport utility vehicle
(SUV) 14
Taxable income 4
Threshold cost of
property 3
Listed property 14
Recapture 3, 14
Special depreciation
allowance 5
Election out 6
Figuring the allowance 6
Listed property 12
Qualified property 5
Recapture 6
U
Uniform capitalization rules 11
Unit-of-production method 6
W
Where to find additional
information 1
Who must file 1