In which year did MACRS become mandatory for property placed in service?

MACRS, or the Modified Accelerated Cost Recovery System, was established by the Tax Reform Act of 1986 and became mandatory for property placed in service after 1986. MACRS was introduced to provide a structured way for businesses to depreciate assets, allowing for larger deductions in the earlier years of an asset's life.

This change in tax policy was significant because it aimed to encourage investment by allowing faster cost recovery for businesses. While there were other depreciation systems in place before MACRS, the year 1986 marked the transition to this newer system for assets put into use in businesses, setting the standard for future tax treatment of property depreciation. Understanding the impact of MACRS helps clarify the development of tax legislation and its effects on business operations.