In context
Recovery periods under General Depreciation System (GDS):
| Class | Recovery period | Typical assets |
|---|---|---|
| 3-year | 3 yrs | Race horses, taxis |
| 5-year | 5 yrs | Vehicles, computers, light trucks, qualified film |
| 7-year | 7 yrs | Office furniture, agricultural machinery |
| 10-year | 10 yrs | Vessels, single-purpose agricultural structures |
| 15-year | 15 yrs | Land improvements, restaurant property, QIP |
| 20-year | 20 yrs | Farm buildings, certain utilities |
| 25-year | 25 yrs | Water utility property |
| 27.5-year | 27.5 yrs | Residential rental property |
| 39-year | 39 yrs | Nonresidential real property |
The 20-year cutoff matters: it’s the eligibility line for §168(k) bonus depreciation. Property with a recovery period of 20 years or less qualifies for bonus; 25-year, 27.5-year, and 39-year do not.
Alternative Depreciation System (ADS) recovery periods are typically longer — 30 years for residential rental, 40 years for nonresidential — and are required for tax-exempt-use property, certain listed property, and property of a real-property trade or business that elected out of §163(j) interest limitation. See the MACRS overview for how recovery periods interact with class lives and conventions.