What is the appropriate recovery period for depreciating new cabinets according to IRS rules?
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Under IRS rules, the appropriate recovery period for depreciating new cabinets depends on how the cabinets are classified for tax purposes. Generally, cabinets installed in a business setting—such as in an office, retail store, or similar commercial environment—are considered tangible personal property and are typically classified as “office furniture, fixtures, and equipment” or as “retail fixtures,” depending on their use and location.
According to the IRS Table of Class Lives and Recovery Periods (see Table B-1 in IRS Publication 946 and Rev. Proc. 87-56), “Office Furniture, Fixtures, and Equipment” (asset class 00.11) includes items such as desks, files, safes, and communications equipment, and specifically encompasses furniture and fixtures that are not structural components of a building. Cabinets, when not permanently affixed as part of the building’s structure, fall within this category.
For such property, the IRS assigns a 7-year recovery period under the General Depreciation System (GDS) of the Modified Accelerated Cost Recovery System (MACRS). The applicable class life is 10 years, but the GDS recovery period is 7 years. If the Alternative Depreciation System (ADS) is required or elected, the recovery period is 10 years.
Key points:- 7-year recovery period (GDS): Most new cabinets installed in a business (not as part of the building’s structural components) are depreciated over 7 years using MACRS GDS.- 10-year recovery period (ADS): If ADS is required (for example, for certain tax-exempt use property, property used outside the U.S., or if the taxpayer elects ADS), the recovery period is 10 years.- If cabinets are structural components: If the cabinets are permanently affixed and considered part of the building’s structure (such as built-in cabinetry in a building’s interior that is integral to the building), they may be treated as part of the building and depreciated over 39 years (nonresidential real property) or 27.5 years (residential rental property).
Conclusion:For most new cabinets that are not structural components of a building, the appropriate recovery period under IRS rules is 7 years using MACRS GDS. If the cabinets are structural components, they must be depreciated over the same period as the building (27.5 or 39 years, depending on property type). Always confirm the specific facts and use of the cabinets to ensure proper classification.
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