IRC §167 · 26 U.S.C. §167
IRC §167: Depreciation Allowance
IRC §167 is the depreciation allowance itself — the reasonable wear-and-tear deduction that §168’s MACRS tables and §179 expensing implement. Every cost-recovery number on every return traces here.
What it governs
- Reasonable allowance for exhaustion, wear, tear, and obsolescence
- Property with a determinable useful life — land never qualifies
- Implemented through MACRS (§168), §179 expensing, and listed-property rules
- Placed-in-service date controls the year — purchase date alone means nothing
In the GuideFull treatment in Chapter 12 of the Guide — THE TAX CUTTERY® Guide to Federal Income Taxation, Professional Edition (564 pages, 24 chapters).
Related sectionsIRC §168 — the MACRS tables that implement §167 · IRC §179 — expensing instead of depreciating
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Questions this section answers
- What’s the difference between §167 and §168?
- §167 grants the allowance in principle; §168’s MACRS supplies the tables, lives, and methods that compute it. Think statute versus spreadsheet — the deduction lives in §167, the arithmetic in §168.
- Can I depreciate land?
- Never — land has no determinable useful life. Allocate the purchase price between land and building at acquisition; only the building (and improvements) depreciates. The allocation follows appraisal, not optimism.
- When does depreciation start?
- When the property is placed in service — ready and available for its assigned use. Equipment bought in December but installed in February starts its clock in February.
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