How many years is a tractor depreciated under MACRS for tax purposes?
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For U.S. federal income tax purposes, a tractor used in farming is classified as "farm machinery" under the Modified Accelerated Cost Recovery System (MACRS). According to the Internal Revenue Code and IRS guidance, farm machinery—including tractors—has a 7-year recovery period under MACRS.
- Under IRC §168(e)(3)(B)(v), farm machinery and equipment (other than grain bins, cotton ginning assets, fences, or other land improvements) placed in service after 2017, with original use commencing with the taxpayer, is classified as 5-year property. However, for most other farm machinery, including tractors, the standard MACRS recovery period is 7 years.
- IRS Publication 946 and 225: Both publications confirm that tractors and other farm machinery are depreciated over 7 years under MACRS.
- Depreciation Methods: The most common method for 7-year property is the 200% declining balance method, switching to straight line when it yields a greater deduction, unless the taxpayer elects another method.
Summary Table from IRS Guidance:
Note: Some specific farm equipment (e.g., machinery and equipment used in a farming business, other than grain bins, cotton ginning assets, fences, or other land improvements, placed in service after 2017 and with original use by the taxpayer) may qualify for a 5-year recovery period, but for most tractors, the 7-year period applies.
Conclusion: A tractor is depreciated over 7 years under MACRS for tax purposes.
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