When using MACRS, the depreciable life of an asset for tax purposes is determined by reference to the tax code; the company does not choose the depreciable life, but rather looks it up.

Question

Quizplus · Accepted Answer

Under the Modified Accelerated Cost Recovery System (MACRS), the depreciable life of an asset for tax purposes is indeed determined by the tax code, and companies must refer to the specified recovery periods for different types of assets as outlined by the IRS, rather than choosing the depreciable life themselves.

When Using MACRS, the Depreciable Life of an Asset for Tax