IRS Special Enrollment Examination (SEE) — Enrolled Agent

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The Modified Accelerated Cost Recovery System (MACRS) is the required depreciation method for most tangible business property placed in service after 1986. Which of the following is a key characteristic of MACRS?

It requires the use of the straight-line method for all asset classes. It allows for larger depreciation deductions in the earlier years of an asset's life. It always uses the actual market value of the asset at the end of each year. Salvage value must be subtracted from the asset's basis before calculating depreciation.

Correct Answer:

It allows for larger depreciation deductions in the earlier years of an asset's life.

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