7-Year MACRS Depreciation: Table, Qualifying Property, and Rules

Under 7-year MACRS depreciation, you multiply the asset’s original cost by a fixed IRS percentage each year for eight tax years, starting at 14.29% in year one. The default method is 200% declining balance paired with the half-year convention, which front-loads the deductions and switches to straight-line partway through. The complete annual percentages, the conventions that can shift them, and two immediate-expensing options that may replace the schedule entirely are all below.

The Complete 7-Year Depreciation Table

The annual percentages for 7-year property under the 200% declining balance method with the half-year convention come from Table A-1 in Publication 946:¹

Year 1: 14.29%
Year 2: 24.49%
Year 3: 17.49%
Year 4: 12.49%
Year 5: 8.93%
Year 6: 8.92%
Year 7: 8.93%
Year 8: 4.46%

Each percentage applies to the asset’s original unadjusted cost basis, not to the remaining balance. For a $10,000 desk, year one is $1,429, year two is $2,449, and the eight annual deductions add to the full $10,000. The schedule runs eight tax years rather than seven because the half-year convention gives you half a year of depreciation at the start and half a year at the end.

What Qualifies as 7-Year MACRS Property

The IRS groups depreciable assets into recovery-period classes based on each asset’s class life. Property with a class life of 10 years or more but less than 16 years falls into the 7-year class under the General Depreciation System.² The most common examples are office furniture and fixtures: desks, file cabinets, safes, and similar items classified under asset class 00.11.¹ The class also picks up:

Agricultural assets such as farm machinery and equipment (used, not new for certain prior years), grain bins, cotton ginning assets, and fences used in a farming business.
Railroad track.
Motorsports entertainment complexes.
Natural gas gathering lines placed in service after April 11, 2005, where original use begins with the taxpayer.
Any property without a designated class life that hasn’t been assigned to another recovery period by law.

That last category is the one that catches people off guard. The 7-year class acts as a default bucket for assets that don’t fit the 3-, 5-, 10-, 15-, 20-, or real-property classes.² Misclassifying an asset into the wrong recovery period changes every year’s deduction, so check the class-life tables in Publication 946 before defaulting to seven years.

Why the Table Looks the Way It Does

The straight-line rate for a 7-year asset is 1/7, or about 14.29%. The 200% declining balance method doubles that to 2/7, or about 28.57%, applied each year to the asset’s remaining undepreciated balance. The method automatically switches to straight-line in the first year that straight-line produces a larger deduction on what’s left.¹ The published table bakes in the rate, the half-year convention, and the switchover, so you never need to run the calculation yourself. Just multiply.

If you prefer a slower, steadier deduction, you can make an irrevocable election to use 150% declining balance or straight-line instead. The election applies to all property in the 7-year class placed in service during that tax year.

Half-Year vs. Mid-Quarter Convention

The half-year convention is the default. It treats every asset placed in service during the year as if it went into use at the midpoint of the year, regardless of the actual date.³ That is the convention baked into the table above.

The mid-quarter convention replaces it when more than 40% of your total depreciable property basis for the year is placed in service during the last three months of the year.³ The test uses the aggregate basis of all depreciable property placed in service that year, and if you cross the threshold, every asset placed in service that year uses the mid-quarter convention, not just the Q4 additions.

Under mid-quarter, each asset is treated as placed in service at the midpoint of the quarter it was acquired. First-year rates for 7-year property become:¹

Q1 (January–March): 25.00%
Q2 (April–June): 17.85%
Q3 (July–September): 10.71%
Q4 (October–December): 3.57%

A $10,000 asset placed in service in Q4 yields only a $357 first-year deduction under mid-quarter, compared with $1,429 under the half-year convention. The schedule also extends to nine tax years for Q4 assets. If you’re planning a large equipment purchase late in the year, run the 40% test first; bunching too much basis into Q4 can slow deductions on everything you bought that year.

Immediate Expensing Before You Build the Schedule

Before running the eight-year table, check whether you can deduct the entire cost up front. Two provisions allow this, and both changed under the One, Big, Beautiful Bill Act signed in July 2025.

Bonus Depreciation

For qualified property acquired after January 19, 2025, bonus depreciation is 100%, letting you deduct the full cost in the year the asset is placed in service.⁴ This applies to both new and used 7-year MACRS assets, provided the property meets the qualified-property requirements (generally, no prior use by the taxpayer and no acquisition from a related party).⁵

Acquisition date matters. If you acquired property before January 20, 2025, and placed it in service in 2026, the old phase-down schedule still applies at a 20% rate.⁶ The gap between 20% and 100% turns on the contract date, so documentation matters. Bonus depreciation is calculated first, before Section 179 or standard MACRS. Take 100% and there is nothing left to depreciate.

Section 179 Expensing

Section 179 lets you elect to deduct the cost of qualifying property, including 7-year MACRS assets, in the year it’s placed in service.⁷ The election is made property by property and comes with limits:

For tax years beginning in 2026, the maximum Section 179 deduction is $2,560,000 (inflation-adjusted from the $2,500,000 statutory base).
The deduction phases out dollar-for-dollar once total qualifying property placed in service during the year exceeds $4,090,000.
The deduction cannot exceed your aggregate taxable income from all active trades or businesses; any excess carries forward.
The property must be used more than 50% for business.

When both provisions apply, bonus depreciation is calculated first; any remaining basis can then be expensed under Section 179 or depreciated under the standard MACRS table.

When the Alternative Depreciation System Is Required

Most businesses use GDS, but certain situations require the Alternative Depreciation System. Under ADS, 7-year GDS property that has no specific ADS designation generally uses a 12-year recovery period with the straight-line method, producing much smaller early-year deductions. ADS is mandatory for 7-year property that is:¹

Tax-exempt use property, such as property leased to a tax-exempt entity.
Property financed with tax-exempt bonds.
Tangible property used predominantly outside the United States.
Listed property used 50% or less for qualified business purposes.
Farm property where the taxpayer elected out of the uniform capitalization rules for farming costs.

You can also voluntarily elect ADS. That election is irrevocable and applies to all property in the same class placed in service during the same tax year.

What Happens When You Sell the Asset

If you sell, retire, or otherwise dispose of 7-year property before the recovery period ends, you get a partial depreciation deduction for the year of disposal. The rules follow the convention you originally used. Under the half-year convention, you take half of the full-year amount for the disposal year. Under the mid-quarter convention, you take a fraction of the full-year amount based on the quarter of disposal: 12.5% for Q1, 37.5% for Q2, 62.5% for Q3, and 87.5% for Q4.¹

Seven-year MACRS property is Section 1245 property. If you sell it for more than its adjusted basis (original cost minus accumulated depreciation), the gain is treated as ordinary income up to the total depreciation you claimed, and only gain beyond that is treated as capital gain.⁸ Section 179 deductions and bonus depreciation count toward the recapture amount, so a full first-year write-off doesn’t shelter you from recapture on a later sale. Report the sale and recapture on Form 4797.⁹

Where It Goes on Form 4562

Annual MACRS depreciation for 7-year property placed in service during the current tax year goes in Part III, Section B of Form 4562, on Line 19c, column (g).² You’ll fill in the month and year placed in service, the cost basis, the 7-year recovery period, the method (200 DB), the convention (HY or MQ), and the calculated deduction. Section 179 deductions go in Part I, bonus depreciation in Part II. For assets already depreciating from a prior year, the current-year deduction belongs in Part III, Section C, line 17.

Keep records of each asset’s original cost, placed-in-service date, convention used, and cumulative depreciation. Those records are the first thing the IRS will ask for in a depreciation-related audit.

1
Internal Revenue Service. Publication 946 (2025), How To Depreciate Property
2
Internal Revenue Service. Instructions for Form 4562 (2025)
3
eCFR. 26 CFR 1.168(d)-1 – Half-Year and Mid-Quarter Conventions
4
Internal Revenue Service. One, Big, Beautiful Bill Provisions
5
Internal Revenue Service. Additional First Year Depreciation Deduction (Bonus) – FAQ
6
Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One, Big, Beautiful Bill
7
Office of the Law Revision Counsel. 26 USC 179 – Election to Expense Certain Depreciable Business Assets
8
Office of the Law Revision Counsel. 26 USC 1245 – Gain From Dispositions of Certain Depreciable Property
9
Internal Revenue Service. About Form 4797, Sales of Business Property