Which Recovery Period Applies?: Business Depreciation (2025 IRS Guide)
This guide covers “Which Recovery Period Applies?” 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.
Which Recovery Period Applies?
The recovery period of property is the number of years over which you recover its cost or other basis. It is determined based on the depreciation system (GDS or ADS) used.
Recovery Periods Under GDS
Under GDS, property is depreciated over one of the following recovery periods.
| Property Class | Recovery Period | |||
| 3-year property | 3 years1 | |||
| 5-year property | 5 years | |||
| 7-year property | 7 years | |||
| 10-year property | 10 years | |||
| 15-year property | 15 years2 | |||
| 20-year property | 20 years | |||
| 25-year property | 25 years3 | |||
| Residential rental property | 27.5 years | |||
| Nonresidential real property | 39 years4 | |||
| 1 5 years for qualified rent-to-own property placed in service before August 6, 1997. | ||||
| 2 39 years for property that is a retail motor fuels outlet placed in service before August 20, 1996 (31.5 years if placed in service before May 13, 1993), unless you elected to depreciate it over 15 years. | ||||
| 3 20 years for property placed in service before June 13, 1996, or under a binding contract in effect before June 10, 1996. | ||||
| 4 31.5 years for property placed in service before May 13, 1993 (or before January 1, 1994, if the purchase or construction of the property is under a binding contract in effect before May 13, 1993, or if construction began before May 13, 1993). | ||||
The GDS recovery periods for property not listed above can be found in Appendix B, Table of Class Lives and Recovery Periods. Residential rental property and nonresidential real property are defined earlier under Which Property Class Applies Under GDS.
Enter the appropriate recovery period on Form 4562 under column (d) in Section B of Part III, unless already shown (for 25-year property, residential rental property, and nonresidential real property).
Office in the home.
If your home is a personal-use single family residence and you begin to use part of your home as an office, depreciate that part of your home as nonresidential real property over 39 years (31.5 years if you began using it for business before May 13, 1993). However, if your home is an apartment in an apartment building that you own and the building is residential rental property, as defined earlier under Which Property Class Applies Under GDS, depreciate the part used as an office as residential rental property over 27.5 years. See Pub. 587 for a discussion of the tests you must meet to claim expenses, including depreciation, for the business use of your home.
Home changed to rental use.
If you begin to rent a home that was your personal home before 1987, you depreciate it as residential rental property over 27.5 years.
Recovery Periods Under ADS
The recovery periods for most property are generally longer under ADS than they are under GDS. The following table shows some of the ADS recovery periods.
| Property | Recovery Period |
| Rent-to-own property | 4 years |
| Automobiles and light duty trucks | 5 years |
| Computers and peripheral equipment | 5 years |
| High technology telephone station equipment installed on customer premises | 5 years |
| High technology medical equipment | 5 years |
| Non-commercial aircraft | 6 years |
| Personal property with no class life | 12 years |
| Commercial aircraft | 12 years |
| Natural gas gathering lines | 14 years |
| Single-purpose agricultural and horticultural structures | 15 years |
| Any tree or vine bearing fruits or nuts | 20 years |
| Initial clearing and grading land improvements for gas utility property | 20 years |
| Initial clearing and grading land improvements for electric utility transmission and distribution plants | 25 years |
| Electric transmission property used in the transmission at 69 or more kilovolts of electricity | 30 years |
| Natural gas distribution lines | 35 years |
| Nonresidential real property | 40 years |
| Residential rental property | 30 years1 |
| Section 1245 real property not listed in Appendix B | 40 years |
| Railroad grading and tunnel bore | 50 years |
| 1 40 years for property placed in service before January 1, 2018. Note: The ADS recovery period for residential rental property placed in service before January 1, 2018, is 30 years if the property is held by an electing real property trade or business (as defined in section 163(j)(7)(B)) and section 168(g)(1)(A), (B), (C), (D), or (E) did not apply to the property before January 1, 2018. | |
The ADS recovery periods for property not listed above can be found in the tables in Appendix B. Rent-to-own property, residential rental property, and nonresidential real property are defined earlier under Which Property Class Applies Under GDS.
Tax-exempt use property subject to a lease.
The ADS recovery period for any property leased under a lease agreement to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership) cannot be less than 125% of the lease term.
Additions and Improvements
An addition or improvement you make to depreciable property is treated as separate depreciable property. See How Do You Treat Repairs and Improvements? in chapter 1 for a definition of improvements. Its property class and recovery period are the same as those that would apply to the original property if you had placed it in service at the same time you placed the addition or improvement in service. The recovery period begins on the later of the following dates.
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The date you place the addition or improvement in service.
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The date you place in service the property to which you made the addition or improvement.
Example.
You own a rental home that you have been renting out since 1981. If you put an addition on the home and place the addition in service this year, you would use MACRS to figure your depreciation deduction for the addition. Under GDS, the property class for the addition is residential rental property and its recovery period is 27.5 years because the home to which the addition is made would be residential rental property if you had placed it in service this year.
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 Recovery Period Applies? — 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.