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taxmap/pubs/p946-000.htm#en_us_publink1000107281
Publication 946

How To  
Depreciate  
Property

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• Section 179 Deduction
• Special Depreciation
 Allowance
• MACRS
• Listed Property

Future Developments(p2)

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For the latest information about developments related to Pub. 946, such as legislation enacted after this publication was published, go to IRS.gov/Pub946.

What's New for 2017(p2)

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taxmap/pubs/p946-000.htm#en_us_publink100043172
Increased section 179 deduction dollar limits.(p2)
The maximum amount you can elect to deduct for most section 179 property you placed in service in tax years beginning in 2017 is $510,000 ($545,000 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 $2,030,000. See Dollar Limits in chapter 2.
taxmap/pubs/p946-000.htm#en_us_publink100053703
Special depreciation allowance for certain property. (p2)
You may be able to take a 50% special depreciation allowance for certain property acquired before September 28, 2017, and placed in service before January 1, 2018, and certain plants bearing fruits and nuts, planted or grafted before September 28, 2017. The special allowance will be phased down to 40% for certain property acquired before September 28, 2017, and placed in service in 2018. Also, you may be able to take a 100% special depreciation allowance for certain property and certain plants bearing fruits and nuts acquired or planted or grafted after September 27, 2017, and placed in service or planted or grafted after September 27, 2017, and placed in service or planted or grafted before January 1, 2023. You may elect to apply a 50% special depreciation allowance instead of the 100% allowance for the first tax year ending after September 27, 2017. See Certain qualified property acquired before September 28, 2017, Certain property acquired after September 27, 2017, and Certain plants bearing fruits and nuts, later.
taxmap/pubs/p946-000.htm#en_us_publink100078560
Special depreciation allowance for qualified second generation biofuel plant property.(p2)
The special depreciation allowance will not apply to qualified second generation biofuel plant property placed in service after December 31, 2017. See Qualified Second Generation Biofuel Plant Property in chapter 3.
taxmap/pubs/p946-000.htm#en_us_publink100078562
Certain race horses.(p2)
The 3-year recovery period for race horses two years old or younger will not apply to horses placed in service after December 31, 2017. See Which Property Class Applies Under GDS in chapter 4.
taxmap/pubs/p946-000.htm#en_us_publink100078564
Qualified motor sports entertainment complexes.(p2)
Qualified motor sports entertainment complex property placed in service after December 31, 2017, will not be treated as 7-year property under MACRS. See Which Property Class Applies Under GDS in chapter 4.
taxmap/pubs/p946-000.htm#en_us_publink100078566
Accelerated depreciation for qualified Indian reservation property.(p2)
The accelerated depreciation of property on an Indian reservation will not apply to property placed in service after December 31, 2017, or, if you make an irrevocable election out of all property in a class of property that is placed in service in a tax year beginning after December 31, 2016. See Indian Reservation Property in chapter 4.
taxmap/pubs/p946-000.htm#en_us_publink100053765
Depreciation limits on business vehicles. (p2)
The total section 179 deduction and depreciation you can deduct for a passenger automobile (that is not a truck or van) you use in your business and first placed in service in 2017 is $3,160, if the special depreciation allowance does not apply. The maximum deduction you can take for a truck or van you use in your business and first placed in service in 2017 is $3,560, if the special depreciation allowance does not apply. See Maximum Depreciation Deduction in chapter 5.

What's New for 2018(p2)

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taxmap/pubs/p946-000.htm#en_us_publink100053767
Section 179 deduction dollar limits. (p2)
The maximum amount you can elect to deduct for most section 179 property you placed in service in tax years beginning in 2018 is $1,000,000. This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $2,500,000.
taxmap/pubs/p946-000.htm#en_us_publink100078751
Section 179 qualified real property.(p2)
For property placed in service in tax years beginning after December 31, 2017, section 179 qualified real property is qualified improvement property (as defined in section 168(e)(6)), and certain specified improvements to nonresidential real property placed in service after the nonresidential real property was first placed in service.
taxmap/pubs/p946-000.htm#en_us_publink100078752
Computers and related peripheral equipment.(p2)
Computers and related peripheral equipment placed in service after December 31, 2017, in tax years ending after December 31, 2017, are not listed property.
taxmap/pubs/p946-000.htm#en_us_publink100078753
Electing real property trade or business and electing farm business.(p2)
An electing real property trade or business (as defined in section 163(j)(7)(B)) and electing farming business (as defined in section 163(j)(7)(C)) are required to use the alternative depreciation system for certain property to figure depreciation under MACRS for tax years beginning after December 31, 2017.

Reminders(p3)

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taxmap/pubs/p946-000.htm#en_us_publink100053769
Photographs of missing children.(p3)
The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

taxmap/pubs/p946-000.htm#en_us_publink1000270855Introduction

This publication explains how you can recover the cost of business or income-producing property through deductions for depreciation (for example, the special depreciation allowance and deductions under the Modified Accelerated Cost Recovery System (MACRS)). It also explains how you can elect to take a section 179 deduction, instead of depreciation deductions, for certain property, and the additional rules for listed property.
EIC
The depreciation methods discussed in this publication generally do not apply to property placed in service before 1987. For more information, see Pub. 534, Depreciating Property Placed in Service Before 1987.
taxmap/pubs/p946-000.htm#en_us_publink1000107292

Definitions.(p3)

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Many of the terms used in this publication are defined in the Glossary near the end of the publication. Glossary terms used in each discussion under the major headings are listed before the beginning of each discussion throughout the publication.
taxmap/pubs/p946-000.htm#en_us_publink1000107293

Do you need a different publication?(p3)

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The following table shows where you can get more detailed information when depreciating certain types of property.
For information
on depreciating:
See Publication:
A car463, Travel, Entertainment, Gift, and Car Expenses
Residential rental property527, Residential Rental Property (Including Rental of Vacation Home)
Office space in your home587, Business Use of Your Home (Including Use by Daycare Providers)
Farm property225, Farmer's Tax Guide
taxmap/pubs/p946-000.htm#en_us_publink1000290371

Comments and suggestions.(p3)

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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/FormsComments. Or you can write to:

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


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/p946-000.htm#en_us_publink1000290372
Ordering forms and publications.(p3)
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/p946-000.htm#en_us_publink1000290373
Tax questions.(p3)
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.