MACRS Depreciation: Depreciation Methods (200% DB, 150% DB, Straight-Line)
Quick answer
MACRS sets a default depreciation method by property class under IRC §168(b). Most 3, 5, 7 and 10 year property uses 200% declining balance, 15 and 20 year property uses 150% declining balance, and real property uses straight-line. Declining balance switches to straight-line when that yields a larger deduction. Taxpayers may elect a slower method.
Depreciation Methods (200% DB, 150% DB, Straight-Line) is tested on EA Exam Part 2 (Business Income & Deductions). Primary IRS reference: IRC § 168(b).
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About this EA exam topic
This subtopic tests the depreciation methods within MACRS: 200% declining balance, 150% declining balance, and straight-line, plus the switch to straight-line when it yields a larger deduction.
The EA exam tests which method applies to which property class and the option to elect a slower method.
What you'll be tested on
- Default methods by property class (200% DB, 150% DB)
- The switch to straight-line within MACRS
- Electing 150% DB or straight-line
- Effect of method choice on early-year deductions
How to prepare
- Know the default method for common classes.
- Remember MACRS switches to straight-line automatically when beneficial.
- Understand why a taxpayer might elect a slower method.
Practice questions for Depreciation Methods (200% DB, 150% DB, Straight-Line)
What this topic covers
Depreciation Methods (200% DB, 150% DB, Straight-Line) appears in Part 2: Business Taxation within the Business Income & Deductions domain. VantageEA practice questions focus on how macrs depreciation rules are applied in realistic EA exam fact patterns.
What candidates practice
Candidates practice identifying tested facts, choosing the best multiple-choice answer, and reviewing explanations tied to IRC § 168(b), IRS Publication 946. This topic supports timed 100-question PSI-style mock tests and shorter topic review sessions.
Related practice-question themes include macrs, depreciation, 200-declining-balance, 150-db.
Topic overview
Official IRS sources
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Frequently asked questions
Which MACRS method is the default?
200% declining balance for most shorter-lived personal property, 150% for some classes, straight-line for real property.
Which part?
Part 2 (Businesses).
Reference?
IRS Publication 946.
Continue studying
More Business Income & Deductions topics from Part 2
Business Deductions: Business Deductions (Travel, Meals, Home Office)
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MACRS Depreciation: Alternative Depreciation System (ADS)
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MACRS Depreciation: Half-Year Convention & MACRS Tables
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MACRS Depreciation: Mid-Quarter Convention
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MACRS Depreciation: Property Classes & Recovery Periods
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MACRS Depreciation: Section 179 Interaction with MACRS
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