IRS Publication 946
Publication 946, How To Depreciate Property, is the IRS’s plain-language depreciation guide. The 2025 edition reflects the July 2025 law, including 100 percent bonus depreciation after January 19, 2025. No 2026 edition had been released as of October 16, 2026.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- The current edition is for 2025 returns; no 2026 edition had been released as of October 16, 2026.
- It covers what can be depreciated, §179, the special depreciation allowance, MACRS, and listed property.
- It describes 100% bonus depreciation for qualified property acquired after January 19, 2025, and the 40%/60% transition election.
- Appendix B reproduces the Rev. Proc. 87-56 class lives used to classify property.
- The publication is an IRS explanation, not the statute.
IRS Publication 946 explains how to figure depreciation: what can be depreciated, when depreciation begins and ends, the §179 deduction, the special (bonus) depreciation allowance, MACRS methods and conventions, and listed property. It includes depreciation tables and worksheets. Land is listed among property that cannot be depreciated.
The 2025 edition describes the changes made by Public Law 119-21: 100 percent bonus depreciation for qualified property acquired after January 19, 2025, the reduced-rate election for the first year ending after that date, the new qualified production property allowance, and the higher §179 limits. It includes a What’s New for 2026 note on §179. Those figures should be read with their tax years: $2,500,000 / $4,000,000 for tax years beginning in 2025, and $2,560,000 / $4,090,000 for tax years beginning in 2026.
Publication 946 is the IRS’s plain-language restatement. Where it summarizes a statute or regulation, the underlying authority controls. It is a reliable starting point for methods, conventions, and class lives, and a poor substitute for the Code when a close question arises.
For cost segregation, Appendix B is the most-used part. Table B-1 lists asset classes used in all businesses. Table B-2 lists activity classes. Each row gives the class life and the GDS and ADS recovery periods. Class 00.3 (land improvements) excludes buildings and structural components as defined in Treas. Reg. §1.48-1(e).
This page is educational information, not tax advice. No 2026 edition of Publication 946 was found as of October 16, 2026. Until one is issued, the 2025 edition plus later IRS notices and revenue procedures are the current IRS explanations. Super Intelligence is proposed documentation support; it does not replace reading the publication or the statute.
Appendix B and classification order
Table B-1 includes asset-type classes such as 00.11 office furniture, fixtures, and equipment and 00.3 land improvements. Table B-2 includes activity classes such as 57.0 distributive trades and services and 79.0 recreation. When an item fits both an asset class and an activity class, Rev. Rul. 2003-81 — citing Norwest Corp. — places it in the asset class unless it is specifically excluded from the asset class or specifically included in the activity class.
Publication 946’s examples show the override in both directions. Land improvements of a paper manufacturer can fall in the paper-manufacturing activity class rather than 00.3. A lessor generally classifies leased property by the lessee’s activity.
Some Appendix B table values were hard to read in PDF extraction during research. Class 57.0 is treated in IRS materials as a class life that maps to 5-year GDS property. Visually confirm a row in the PDF before relying on a single number from a secondary chart.
What the 2025 edition added
The 2025 edition is the first Publication 946 to describe the July 2025 law. It separates property acquired after January 19, 2025 (100 percent, as of that edition) from property acquired after September 27, 2017 and before January 20, 2025 (phase-down). It describes the 40 percent / 60 percent transition election.
It also describes qualified production property under §168(n) at a summary level and points to Notice 2026-16. That allowance is elective and temporary. Publication 946’s summary is not an eligibility determination for any factory.
The What’s New for 2026 note on §179 matches Rev. Proc. 2025-32. Use the tax year next to every dollar figure. The limits are inflation-adjusted annually.
How to use it
Use Publication 946 to find the class-life table, the convention statements, the listed-property rules, and the IRS’s current-year explanation of §179 and bonus depreciation. Use the Code and regulations when the publication’s paraphrase is thinner than the issue.
The publication is not a cost-segregation manual. It does not replace Treas. Reg. §1.48-1 or the case law on structural components. Appendix B tells you the recovery period once the class is known.
Print editions and the HTML “About Publication 946” page can lag a PDF revision. Check the catalog number and the “for use in preparing [year] returns” line on the PDF you open.
Related IRS explanations
Publication 527 covers residential rental property, including typical class examples for appliances, carpets, furniture, and site work. Form 4562 instructions show where §179, bonus, and MACRS appear on the return. Neither document is the statute.
Publication 5653, the Cost Segregation Audit Techniques Guide, is examiner guidance and is not citable as authority. It predates the 2025 law.
When Publication 946 and a later notice disagree on a time-sensitive rate, the later notice and the statute control. As of October 16, 2026, Notice 2026-11 is the interim bonus-depreciation guidance.
Sources
- 1IRS Publication 946 — How To Depreciate Property (2025)(opens in a new tab)
Appendix B reproduces the Rev. Proc. 87-56 class lives.
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