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Electing a Different Method: Business Depreciation (2025 IRS Guide)

This guide covers “Electing a Different Method” within business depreciation. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 946 (2025), How To Depreciate Property, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

MACRS provides three depreciation methods under GDS and one depreciation method under ADS.

The 200% declining balance method over a GDS recovery period.
The 150% declining balance method over a GDS recovery period.
The straight line method over a GDS recovery period.
The straight line method over an ADS recovery period.

Table 4-1 lists the types of property you can depreciate under each method. It also gives a brief explanation of the method, including any benefits that may apply.

Electing a Different Method

As shown in Table 4-1, you can elect a different method for depreciation for certain types of property. You must make the election by the due date of the return (including extensions) for the year you placed the property in service. However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Attach the election to the amended return and write “Filed pursuant to section 301.9100-2” on the election statement. File the amended return at the same address you filed the original return. Once you make the election, you cannot change it.

Caution:

If you elect to use a different method for one item in a property class, you must apply the same method to all property in that class placed in service during the year of the election. However, you can make the election on a property-by-property basis for nonresidential real and residential rental property.

150% election.

Instead of using the 200% declining balance method over the GDS recovery period for property in the 3-, 5-, 7-, or 10-year property class, you can elect to use the 150% declining balance method. Make the election by entering “150 DB” under column (f) in Part III of Form 4562.

Straight line election.

Instead of using either the 200% or 150% declining balance method over the GDS recovery period, you can elect to use the straight line method over the GDS recovery period. Make the election by entering “S/L” under column (f) in Part III of Form 4562.

Election of ADS.

As explained earlier under Which Depreciation System (GDS or ADS) Applies, you can elect to use ADS even though your property may come under GDS. ADS uses the straight line method of depreciation over fixed ADS recovery periods. Most ADS recovery periods are listed in Appendix B, or see the table under Recovery Periods Under ADS, earlier.

Make the election by completing line 20 in Part III of Form 4562.

15- or 20-year farm property.

Instead of using the 150% declining balance method over a GDS recovery period for 15- or 20-year property you use in a farming business (other than real property), you can elect to depreciate it using either of the following methods.

The straight line method over a GDS recovery period.
The straight line method over an ADS recovery period.

Table 4-1. Depreciation Methods

Note: The declining balance method is abbreviated as DB and the straight line method is abbreviated as SL.
Method	Type of Property	Benefit
GDS using 200% DB	• Nonfarm 3-, 5-, 7-, and 10-year property • Farm 3-, 5-, 7-, and 10-year property placed in service after 2017, in tax years ending after 2017	• Provides a greater deduction during the earlier recovery years • Changes to SL when that method provides an equal or greater deduction
GDS using 150% DB	• Farm 3-, 5-, 7-, or 10-year property placed in service before 2018 • All 15- and 20-year property • Nonfarm 3-, 5-, 7-, or 10-year property² • Farm 3-, 5-, 7-, or 10-year property placed in service after 2017²	• Provides a greater deduction during the earlier recovery years • Changes to SL when that method provides an equal or greater deduction¹
GDS using SL	• Nonresidential real property • Residential rental property • Trees or vines bearing fruits or nuts • Water utility property • All 3-, 5-, 7-, 10-, 15-, and 20-year property² • Property for which you elected section 168(k)(4) of the Internal Revenue Code for a tax year beginning before January 1, 2018 • Qualified improvement property (as defined in section 168(e)(6) of the Internal Revenue Code) placed in service after 2017	• Provides for equal yearly deductions (except for the first and last years)
ADS using SL	• Listed property used 50% or less for business • Property used predominantly outside the United States • Tax-exempt property • Tax-exempt bond-financed property • Farm property used when an election not to apply the uniform capitalization rules is in effect • Imported property³ • Any property for which you elect to use this method⁴ • Any nonresidential real property, residential rental property, or qualfied improvement property held by an electing real property trade or business (as defined in section 163(j)(7)(B) of the Internal Revenue Code) • Any property that has a recovery period of 10 years or more under GDS that is held by an electing farming business (as defined in section 163(j)(7)(C) of the Internal Revenue Code)	• Provides for equal yearly deductions (except for the first and last years)
¹ The MACRS percentage tables in Appendix A have the switch to the straight line method built into their rates.
² See section 168(b)(5) of the Internal Revenue Code.
³ See section 168(g)(6) of the Internal Revenue Code.
⁴ See section 168(g)(7) of the Internal Revenue Code.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

Publication 946 (2025), How To Depreciate Property: Figuring Depreciation Under MACRS — Which Depreciation Method Applies? — Electing a Different Method — Internal Revenue Service; 2025 edition.

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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