What Was the Accelerated Cost Recovery System (ACRS)?

The accelerated cost recovery system was a U.S. federal tax break that was introduced in 1981 and replaced in 1986.

Understanding the Accelerated Cost Recovery System (ACRS)

The Economic Recovery Tax Act of 1981 included the accelerated cost recovery system (ACRS), which changed the rules for depreciating assets purchased from 1980 to 1986. Rather than depreciating income-generating assets using a straight-line approach based on the lifetime of the asset, ACRS allowed taxpayers to depreciate them on shorter schedules based on cost recovery. Accelerated depreciation increased the deductions property owners were able to claim, which the law's proponents believed would accelerate economic growth.

ACRS was modified in 1984, and the Tax Reform Act of 1986 replaced it with the modified accelerated cost recovery system (MACRS).