1684.02 Real estate depreciation.

Tax Tip: Not all real property is "real estate" under MACRS. For example, single-purpose agricultural structures are in the 10-year class. More importantly, land improvements are not included in the definition of 27 1/2-year residential property or, 39 or 31 1/2-year property. Land improvements, such as parking lots, sidewalks, roads, landscaping, and fences have a 20-year midpoint under ADR. And property with a 20-year midpoint is 15-year recovery property under MACRS. See 1685.01. Thus, land improvements-- a major expense of any large project -- appear to qualify for 150% declining balance recovery over a 15-year period. See class 00.3 in Rev Proc 87-56, 1987-2 CB 674 at 1685.01.