Accelerated Cost Recovery System

What is the Accelerated Cost Recovery System?

Depreciation deductions are the biggest benefits of real estate for many investors. This depreciation is available with any tangible investment property that an investor buys.

The IRS figures that most capital equipment or improvements lose value over time because of their decreased useful life. [Of course, real estate is different, but the building and other improvements can still claim depreciation.]

The Accelerated Cost Recovery System (ACRS) is a method of depreciation introduced by the Economic Recovery Act of 1981. It calculates the useful life of various property types, for the purpose of determining depreciation. However, instead of giving a steady depreciation rate over the property’s projected life, ACRS allows for greater deductions in the earlier years.

For more information, see also the following entries:

  • :Capital Improvements:
  • :D eductions:
  • :D epreciation:
  • :Economic Recovery Act of 1981:
  • :Improvements:
  • :Investment Property:
  • :Real Estate:
  • :Useful Life:


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