Accelerated Cost Recovery System
E1029407
The Accelerated Cost Recovery System is a U.S. tax depreciation method that allows businesses to write off the cost of capital assets more quickly than under traditional depreciation rules, thereby encouraging investment.
Statements (39)
| Predicate | Object |
|---|---|
| instanceOf |
United States federal tax concept
ⓘ
capital cost recovery method ⓘ tax depreciation system ⓘ |
| abbreviation | ACRS NERFINISHED ⓘ |
| administeredBy | Internal Revenue Service NERFINISHED ⓘ |
| appliesTo |
business taxpayers
ⓘ
capital assets ⓘ tangible depreciable property ⓘ |
| classificationMethod | asset class life system ⓘ |
| componentOf | United States federal income tax code NERFINISHED ⓘ |
| contrastsWith |
economic depreciation
ⓘ
straight-line depreciation ⓘ |
| country |
United States of America
ⓘ
surface form:
United States
|
| domain |
accounting
ⓘ
taxation ⓘ |
| effect |
defers tax liability to later years
ⓘ
reduces taxable income in early years of asset life ⓘ |
| encourages | capital investment by businesses ⓘ |
| excludes |
inventory
ⓘ
land ⓘ |
| feature |
allows accelerated depreciation compared to straight-line
ⓘ
ignores estimated useful life of specific assets ⓘ separates assets into classes with fixed recovery periods ⓘ uses statutory recovery periods ⓘ |
| hasConsequence |
alters timing of tax payments but not total deductions
ⓘ
front-loads depreciation deductions ⓘ |
| historicalSuccessor | Modified Accelerated Cost Recovery System under the Tax Reform Act of 1986 NERFINISHED ⓘ |
| introducedBy | United States Congress NERFINISHED ⓘ |
| legalBasis | Economic Recovery Tax Act of 1981 NERFINISHED ⓘ |
| policyType | supply-side tax policy ⓘ |
| purpose |
to accelerate depreciation deductions
ⓘ
to encourage investment in capital assets ⓘ |
| relatedTo |
Modified Accelerated Cost Recovery System
NERFINISHED
ⓘ
capital cost recovery ⓘ depreciation ⓘ |
| replacedBy | Modified Accelerated Cost Recovery System NERFINISHED ⓘ |
| startUseYear | 1981 ⓘ |
| timePeriod | early 1980s ⓘ |
| usedFor | federal income tax depreciation calculations ⓘ |
Referenced by (1)
Full triples — surface form annotated when it differs from this entity's canonical label.
subject surface form:
Economic Recovery Tax Act of 1981