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taxmap/pubs/p534-000.htm#en_us_publink100043745
Publication 534

Depreciating Property Placed in Service Before 1987

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taxmap/pubs/p534-000.htm#en_us_publink100043582Introduction

The law allows you to recover your cost in business or income-producing property through yearly tax deductions. You do this by depreciating your property, that is, by deducting some of your cost on your tax return each year. You can depreciate both tangible property, such as a car, building, or machinery, and certain intangible property, such as a copyright or a patent.
The amount you can deduct depends on:
  1. How much the property cost,
  2. When you began using it,
  3. How long it will take to recover your cost, and
  4. Which of several depreciation methods you use.
taxmap/pubs/p534-000.htm#en_us_publink100043583

Depreciation defined.(p1)

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Depreciation is a loss in the value of property over the time the property is being used. Events that can cause property to depreciate include wear and tear, age, deterioration, and obsolescence. You can get back your cost of certain property, such as equipment you use in your business or property used for the production of income by taking deductions for depreciation.
taxmap/pubs/p534-000.htm#en_us_publink100043584

Amortization.(p1)

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Amortization is similar to depreciation. Using amortization, you can recover your cost or basis in certain property proportionately over a specific number of years or months. Examples of costs you can amortize are the costs of starting a business, reforestation, and pollution control facilities. You can find information on amortization in chapter 8 of Pub. 535, Business Expenses.
taxmap/pubs/p534-000.htm#en_us_publink100043585

Alternative minimum tax. (p2)

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If you use accelerated depreciation for real property, or personal property that is leased to others, you may be liable for the alternative minimum tax. Accelerated depreciation is any method that allows recovery at a faster rate in the earlier years than the straight line method. For more information, you may wish to see the following.
taxmap/pubs/p534-000.htm#en_us_publink100048737

Comments and suggestions.(p2)

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We welcome your comments about this publication and your suggestions for future editions.
You can send us comments from irs.gov/formspubs. Click on "More Information" and then on "Give us feedback."
Or you can write to:

Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.
taxmap/pubs/p534-000.htm#en_us_publink100048738
Ordering forms and publications.(p2)
Visit irs.gov/formspubs to download forms and publications. Otherwise, you can go to irs.gov/orderforms to order current and prior-year forms and instructions. Your order should arrive within 10 business days.
taxmap/pubs/p534-000.htm#en_us_publink100048739
Tax questions.(p2)
If you have a tax question not answered by this publication, check IRS.gov and How To Get Tax Help at the end of this publication.
taxmap/pubs/p534-000.htm#en_us_publink100043589

How To Use This Publication(p2)

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This publication describes the kinds of property that can be depreciated and the methods used to figure depreciation on property placed in service before 1987. It is divided into three chapters and contains an appendix.