We have a client who sells Medical Equipment. What life do we use for depreciation? I've seen 5, 10, and 15 years? They are leasing the equipment.

Thanks!

Generally speaking, most CPA's would use the MACRS 7 years recovery period. If one examines the items that are provided by the IRS that are included for the 5 year and 10 year recovery method, I think you will come to the same conclusion, that Medical Equipment is best recovered over a 7 Year period!

5-year property includes:
*Automobiles.
*Light general purpose trucks.
*Typewriters, calculators, copiers, and duplicating equipment.
*Any semi-conductor manufacturing equipment.
*Any computer or peripheral equipment.
*Any section 1245 property used in connection with research and experimentation.
*Certain energy property specified in section 168(e)(3)(B)(vi).
*Appliances, carpets, furniture, etc., used in a rental real estate activity.

7-year property includes:
*Office furniture and equipment.
*Railroad track.
*Any motorsports entertainment complex (as defined in section 168(i)(15)) placed in service before January 1, 2008.
*Any property that does not have a class life and is not otherwise classified.

Source: "IRS Website" at Instructions for Form 4562 (2007)

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