Tax Depreciation Reference Sheet — for completing the Client Lifecycle Plan
Tax Depreciation Reference Sheet
IRS MACRS Class Lives & Special Rules — Client Lifecycle Plan Support
MXM Turbinetec LLC
Tax Year 2026 Reference
Disclaimer: This reference sheet is a general guide to common IRS MACRS class lives and special depreciation rules to assist with completing the Client Lifecycle Plan. It is not tax advice. Always confirm classifications and current limits with a licensed CPA or tax professional before filing.
MACRS Class Life Reference
Match each equipment asset in the Lifecycle Plan to the closest classification below.
| Equipment / Asset Type | MACRS Class | Method | Recovery | Notes |
|---|---|---|---|---|
| Computers, office equipment, peripherals | 5-Year | 200% DB | 5 yrs | Includes software, POS systems, IT hardware. |
| Vehicles, light trucks (under 6,000 lbs GVW) | 5-Year | 200% DB | 5 yrs | Passenger vehicles subject to annual luxury limits (§280F). |
| Heavy trucks, vans, service vehicles (over 6,000 lbs GVW) | 5-Year | 200% DB | 5 yrs | Eligible for §179 and bonus depreciation. |
| Dry ice blasting units, pressure washers, compressors | 7-Year | 200% DB | 7 yrs | General industrial machinery not specifically listed elsewhere. |
| HEPA negative air machines, vacuums, recovery systems | 7-Year | 200% DB | 7 yrs | General industrial equipment — 7-year default. |
| Mobile air aftercoolers, moisture decks | 7-Year | 200% DB | 7 yrs | Air treatment / compressed-air equipment. |
| FAA shadowed tool cabinets, ground power units (GPU) | 7-Year | 200% DB | 7 yrs | Aviation ground support equipment — 7-year default. |
| Office furniture, fixtures, shelving | 7-Year | 200% DB | 7 yrs | Desks, cabinets, storage fixtures. |
| HVAC, refrigeration, commercial freezers | 39-Year | SL | 39 yrs | Building systems — treated as real property. |
| Land improvements, parking, fencing, lighting | 15-Year | 150% DB | 15 yrs | Qualified improvement property / land prep. |
| Leasehold / qualified improvement property (interior) | 15-Year | 150% DB | 15 yrs | QIP — non-structural interior build-outs. |
| Safety equipment, PPE (consumable) | Expense | §179 / Deduct | 1 yr | Consumable PPE is typically expensed in year of purchase. |
| Safety equipment, PPE (durable / reusable) | 5-Year | 200% DB | 5 yrs | Reusable harnesses, respirators, hard hats — treat as 5-yr property. |
Special Depreciation Rules
Section 179 Expensing
Allows immediate expensing of qualifying equipment in the year placed in service. 2026 annual limit: $1,160,000 (phases out dollar-for-dollar above $2,890,000 in purchases). Applies to tangible personal property used in a trade or business — including most industrial equipment in this plan.
Bonus (First-Year) Depreciation
Additional first-year deduction on qualified property. Current rate: 40% for property placed in service in 2026 (scheduled to phase down 20% per year). Applies to new and used property with a recovery period of 20 years or less.
MACRS 200% Declining Balance
Default method for 3-, 5-, 7-, and 10-year property. Switches to straight-line in the year it yields a larger deduction. Half-year convention applies unless more than 40% of assets are placed in service in the last quarter (mid-quarter convention).
Listed Property & Luxury Vehicle Limits
Passenger vehicles under 6,000 lbs are 'listed property' subject to annual depreciation caps (§280F). Heavy vehicles (over 6,000 lbs GVW) are exempt and eligible for full §179 / bonus treatment.
Placed-in-Service Date
Depreciation begins when the asset is 'ready and available' for use — not the purchase date. Equipment still in transit or not yet installed does not qualify for that tax year.
Like-Kind Exchanges (§1031)
Available only for real property after 2018. Personal property (equipment, vehicles) no longer qualifies — gains on traded equipment are taxable.
How to Use This Sheet with the Lifecycle Plan
- For each equipment row in the Capital Allocation Matrix, find the closest asset type above.
- Enter the MACRS Class value (e.g. "7-Year Property") into the Tax Depreciation (IRS Class) column.
- If the asset qualifies, note Section 179 Eligible or Bonus Eligible alongside the class.
- For consumable PPE, enter Expense (Year 1) — no depreciation schedule needed.
- Confirm all classifications with your CPA before filing.