Video: Modified Accelerated Cost Recovery System (MACRS) Depreciation

In this lesson, Nick Palazzolo, CPA, breaks down the complexities of the Modified Accelerated Cost Recovery System (MACRS), clarifying how businesses can utilize the system to claim depreciation deductions for tangible property. Exploring the essential components of MACRS, such as the accelerated deductions in early years and the relevant recovery periods for different property classes, Nick ensures comprehension by preemptively addressing common sources of confusion. He delves into the specifics of half-year and mid-quarter conventions used in depreciation, demonstrating how these methods aim to create equitable treatment for tax purposes and prevent strategic manipulation of deductions. Furthermore, Nick emphasizes the importance of adhering to the selected convention for an asset's entire recovery period while also providing a road map of what to expect on the CPA exam regarding MACRS calculations and conventions.