If you began operating your business before 1987, you might be using some assets that were put into service before that year. If so, you'll have to continue to use a set of depreciation methods known as "ACRS," which stands for Accelerated Cost Recovery System.

ACRS used shorter recovery periods for most assets than those currently in use under MACRS. Personal property was classified as 3-year (cars, trucks, racehorses, tractors); 5-year (computers, copiers, equipment, furniture, petroleum storage facilities, single-purpose horticultural and agricultural buildings); or 10-year (theme-park structures, public utility property, manufactured homes and railroad tank cars). The normal ACRS recovery periods for property of these types purchased before 1987 would already have expired, unless a longer period was elected as described below.

Under ACRS, real estate is depreciable over 15 years if placed into service after 1980 but before March 16, 1984; over 18 years if placed into service on or after March 16, 1984 but before May 9, 1985; and over 19 years if placed into service on or after May 9, 1985 through the end of 1986.

To find the depreciation deduction for any of these properties, get a copy of IRS Publication 534, Depreciating Property Placed in Service Before 1987, which you can obtain for no charge by calling 1-800-TAX-FORM, or download it from the IRS website.

Even older methods. For property placed into service before 1981, you could generally use any reasonable method for depreciating property based on its tax basis, useful life, and salvage value.

If you still hold such property and it is not yet fully depreciated, you must continue to use the same method you've established in previous years, or get IRS permission to change your accounting method by filing IRS Form 3115. There is an exception to this rule if you want to change to a straight-line method; in that case, you generally don't need advance permission, although you must attach a statement to your tax return that explains what you're doing. See IRS Publication 534, Depreciating Property Placed in Service Before 1987, for more details.