Equipment Depreciation Calculator (MACRS 7-Year)

Most machinery and equipment without a specifically assigned shorter or longer class: manufacturing and production machinery, machine tools, agricultural equipment, office furniture, fixtures, and many shop and industrial assets. Computers and vehicles are 5-year; some tooling is 3-year; land improvements are 15-year. Check IRS Pub. 946's class-life tables to confirm your asset's class.

It depends on your tax position. Expensing immediately (Section 179/bonus) maximises the current-year deduction and cash flow — ideal if you have the income to absorb it. Spreading it via MACRS gives steady deductions over eight years, which can be better if you expect higher tax rates later or have low current income. Model both; many businesses expense up to the Section 179 income limit, then bonus the rest.

Under MACRS, yes — it depreciates the full basis to zero over the recovery period and ignores salvage. Book (financial-statement) depreciation may still use salvage value with straight-line or declining balance, which is why tax and book depreciation differ. If you sell the equipment for more than its depreciated basis, depreciation recapture applies on the gain.

If you sell for more than the remaining book/tax basis, the excess up to prior depreciation is 'recaptured' and taxed as ordinary income (Section 1245 for equipment); gain above original cost is capital gain. If you scrap it for less than basis, you may claim a loss. Either way, the disposal is a taxable event — track each asset's remaining basis (the schedule here helps) so you can compute the gain or loss correctly.