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When do I use ADS (Alternative Depreciation System) for my properties?

A taxpayer must use GDS (General Depreciation System) unless specifically required or an election is made to use ADS. In which case, one should use ADS for the following properties: 

  1. Listed property used 50% or less in a qualified business use. 

  2. Any tangible property used predominantly outside the US during the year. 

  3. Any tax-exempt use property. 

  4. Any tax exempt bond-financed property. 

  5. Any property used predominantly in a farming business and placed in service during any tax year in which an election is made not to apply the uniform capitalization rules to certain farming costs. 

  6. Any property imported from a foreign country for which an Executive Order is in effect because the country maintains trade restrictions or engages in other discriminatory acts. 

However, if you had a depreciable tangible property between the years 1980-1987, you should use ACRS (Accelerated Cost Recovery System) to figure depreciation. 


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