## Table 108

MACRS Book Values

A nonresidential real property, such as an office building, is depreciated over 31.5 years using straight-line depreciation. A residential real property, such as an apartment building, is depreciated straight-line over 27.5 years. Remember that land cannot be depreciated.12 To illustrate how depreciation is calculated, we consider an automobile costing $12,000. Autos are normally classified as five-year property. Looking at Table 10.7, we see that the relevant figure for the first year of a five-year asset is 20 percent.13 The depreciation in the first year is thus $12,000 X .20 = $2,400. The relevant percentage in the second year is 32 percent, so the depreciation in the second year is $12,000 X .32 = $3,840, and so on. We can summarize these calculations as follows:

Year |
MACRS Percentage |
Depreciation |

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