Can Furniture Be Depreciated? MACRS Rules and Section 179

Yes, furniture can be depreciated when you use it in a business or an income-producing activity such as a rental. The IRS treats furniture as tangible personal property with a limited useful life, so its cost is recovered through annual depreciation deductions under the Modified Accelerated Cost Recovery System (MACRS). Office furniture normally follows a 7-year recovery period and residential rental furniture a 5-year period, but most small buyers skip the multi-year schedule entirely by electing Section 179 expensing or 100% bonus depreciation and writing off the full price in the first year.

When Furniture Qualifies for Depreciation

Four conditions must be satisfied. You must own the property, use it in a business or income-producing activity, expect it to wear out over time, and expect it to last more than one year.¹ Furniture you lease from someone else generally fails the ownership test. Furniture used solely for personal purposes is never depreciable.

Mixed-use furniture gets prorated. A desk in a spare bedroom used 60% of the time for your consulting business and 40% for personal tasks is depreciable at 60% of its cost.¹ A simple log of how you split time or space is worth keeping.

Home Office Furniture

If you work from home, furniture qualifies only when it sits in a space used regularly and exclusively for business. “Exclusive” is literal: the area cannot double as a guest room or homework station, even occasionally.² The space also must be your principal place of business, a location where you regularly meet clients, or a separate structure used in connection with your trade.³ Furniture in a dedicated commercial office or retail location doesn’t face this test.

Rental Property Furniture

Landlords who furnish rental units can depreciate that furniture as part of the rental activity. Appliances, couches, beds, and other items provided to tenants all qualify, and they use the shorter 5-year recovery period rather than the 7-year period for office furniture.⁴ One boundary matters here. If renting is not your trade or business — say, you inherited a single unit and passively collect rent — the furniture may still be depreciable as income-producing property, but it will not qualify for Section 179 immediate expensing.

Recovery Periods Under MACRS

MACRS, established by 26 U.S.C. § 168, assigns furniture to property classes that control how long the deduction is spread over.⁵ The two categories that cover most furniture are:

7-year property: office furniture and fixtures, including desks, chairs, filing cabinets, safes, and bookshelves.¹
5-year property: furniture, appliances, and carpeting in a residential rental real estate activity.⁴

Under the General Depreciation System (GDS), which applies to most taxpayers, 7-year furniture uses the 200% declining balance method and switches to straight-line in the fifth year when that produces a larger deduction.¹ Five-year rental furniture uses the same accelerated approach and switches in the fourth year. Both methods front-load the deductions. The Alternative Depreciation System stretches the schedule with straight-line only and applies in narrow circumstances, such as property used predominantly outside the United States.⁵

Deducting the Full Cost in Year One

Spreading a chair’s cost over seven tax returns is the textbook method, but most small businesses use one of three shortcuts that push the whole deduction into the year of purchase.

Section 179 Expensing

Section 179 lets you elect to deduct the full purchase price of qualifying furniture in the year it’s placed in service. For tax years beginning in 2026, the maximum deduction is $2,560,000, phasing out dollar-for-dollar once total qualifying property placed in service during the year exceeds $4,090,000.¹

Restrictions apply. The furniture must be acquired by purchase; inherited or gifted furniture doesn’t qualify. You must use it more than 50% for business in the year it’s placed in service. And the Section 179 deduction cannot exceed your taxable income from active trades or businesses for the year, though excess amounts carry forward.¹ Furniture held purely for investment or for passive rental income (when renting isn’t your trade or business) does not qualify.

Bonus Depreciation

Bonus depreciation, the additional first-year depreciation deduction, works alongside or instead of Section 179. Under the One, Big, Beautiful Bill signed in 2025, qualifying business property bought and placed in service after January 19, 2025 is eligible for 100% bonus depreciation.⁶ There is no dollar cap and no taxable-income limit, so it works even when the purchase produces a net loss for the year. Taxpayers can also elect a reduced 40% bonus percentage for property placed in service during the first tax year ending after January 19, 2025, which can help with bracket management.⁷ Many small businesses apply Section 179 first up to their income limit, then use bonus depreciation on any remainder.

The De Minimis Safe Harbor

For a $200 chair or a $150 bookshelf, you don’t need a depreciation schedule at all. The de minimis safe harbor election lets you deduct low-value tangible property immediately as a business expense. Businesses without audited financial statements can expense items costing up to $2,500 per invoice or per item, and businesses with an applicable financial statement have a $5,000 per-item threshold.⁸ The election is made each year by attaching a statement to a timely filed return, and it removes the paperwork burden for small incremental furniture purchases.

Converting Personal Furniture to Business Use

Furniture originally bought for personal use can be depreciated once you convert it. The placed-in-service date becomes the conversion date, the day you move a bookcase into your home office or start using a table for client meetings.¹

The catch is basis. You do not use what you originally paid. Basis is the lesser of your adjusted basis (typically original cost) or the furniture’s fair market value on the date of conversion.¹ A desk you bought for $1,500 three years ago that is now worth $600 has a $600 depreciable basis.

How to Calculate the Deduction

Three pieces of information drive the annual number: cost basis, placed-in-service date, and recovery period.

Cost basis includes the purchase price plus sales tax, freight, delivery, and installation.¹ A $3,000 standing desk with $240 sales tax and $150 assembly has a $3,390 basis. For mixed-use furniture, multiply that basis by the business-use percentage.

The placed-in-service date is the day the furniture became available and ready for its intended business function, not the day you bought it and not the day you first actually used it.¹ That date fixes the tax year and the applicable convention.

MACRS conventions standardize when in the year depreciation begins. The default is the half-year convention: all property placed in service during the year is treated as placed at the midpoint, producing half a year’s deduction in the first year and half in the last. If more than 40% of the total basis of depreciable property you place in service during the year lands in the last three months, the mid-quarter convention applies instead and treats each asset as placed at the midpoint of the quarter it was acquired.⁹

Repairs Versus Improvements

Not every dollar spent on existing furniture creates a new depreciable asset. Routine repairs — tightening screws, replacing casters, reupholstering a worn seat — are deductible as current expenses in the year paid. Improvements must be capitalized and depreciated.

The IRS treats an expenditure as a capitalizable improvement if it produces any of the following:⁸

A betterment: fixing a pre-existing defect, adding a major component, or materially increasing capacity, efficiency, or output.
A restoration: replacing a major component, returning non-functional property to working order, or rebuilding to like-new condition after the end of its class life.
An adaptation: changing the property to a use inconsistent with its original purpose when placed in service.

Most furniture repairs do not hit these thresholds. Refinishing a conference table or replacing a drawer handle is a current repair. Rebuilding modular office systems into a wholly different configuration could cross into improvement territory.

How to Claim It on Your Return

Depreciation, Section 179 elections, and bonus depreciation are all reported on Form 4562, Depreciation and Amortization. The form requires each asset’s description, placed-in-service date, cost basis, recovery period, method, and deduction amount.¹⁰ It attaches to your income tax return, typically alongside Schedule C for sole proprietors or Schedule E for landlords.

One trap catches people who try to be conservative. Depreciation is not optional once furniture is placed in service. Even if you never claim the deduction, the IRS still requires you to reduce the property’s basis by the depreciation that was “allowable.” Skip three years of depreciation on a desk and then sell it, and the IRS computes your gain as though you had taken those deductions all along.¹ You lose the tax benefit but still owe tax on the phantom basis reduction.

Selling or Disposing of Depreciated Furniture

When you sell furniture you’ve depreciated, any gain attributable to the depreciation you claimed, or were entitled to claim, is taxed as ordinary income under Section 1245 rather than at capital gains rates.¹¹ This is depreciation recapture.

The math: a $5,000 conference table fully depreciated to a zero basis, sold for $2,000, produces $2,000 of ordinary income because the sale amount falls within the depreciation previously taken. Sell the same table for $6,000, and the first $5,000 is ordinary income while the $1,000 above original cost is capital gain.

If you throw the furniture away, you recognize a loss equal to the remaining adjusted basis. Fully depreciated furniture at zero basis produces no deduction when it goes to the dumpster. Donating to a qualified charity may generate a charitable deduction for fair market value, though those rules sit outside the depreciation framework.

Records to Keep

The general rule is to keep tax records at least three years from the filing date.¹² Furniture records should live longer, ideally through the entire recovery period plus three years after the return for the year of disposition. A desk bought in 2026 and depreciated over seven years hits its final year on the 2032 return; the statute of limitations on that return runs through 2035.

Keep the original purchase invoice, delivery receipts, sales tax documentation, and a depreciation schedule showing method, convention, and annual deduction for each asset. If you converted personal furniture to business use, keep evidence of the fair market value at conversion, such as a comparable listing or appraisal. Those records are what you rely on if the deduction is ever questioned.

1
Internal Revenue Service. Publication 946 (2025), How To Depreciate Property
2
Internal Revenue Service. Office in the Home – Frequently Asked Questions
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Internal Revenue Service. Topic no. 509, Business Use of Home
4
Internal Revenue Service. Publication 527 (2025), Residential Rental Property
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Office of the Law Revision Counsel. 26 U.S.C. 168 – Accelerated Cost Recovery System
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Internal Revenue Service. One, Big, Beautiful Bill Provisions
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Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One, Big, Beautiful Bill
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Internal Revenue Service. Tangible Property Regulations – Frequently Asked Questions
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eCFR. 26 CFR 1.168(d)-1 Applicable Conventions – Half-Year and Mid-Quarter Conventions
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Internal Revenue Service. 2025 Instructions for Form 4562 – Depreciation and Amortization
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Office of the Law Revision Counsel. 26 U.S. Code 1245 – Gain From Dispositions of Certain Depreciable Property
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Internal Revenue Service. How Long Should I Keep Records?