Recovery Period

Definition: A recovery period is the tax-law period over which the depreciable basis of an asset is allocated under the applicable depreciation system.

Example

Under ordinary federal GDS rules, a residential rental building generally uses 27.5 years, while a nonresidential building generally uses 39 years.

Keep the distinction clear

Land is not depreciable. The recovery period differs from a building's economic life, and the applicable method, property classification, and convention affect the actual deduction.

Related terms

Depreciation · Economic Life · Adjusted Basis

Keep studying

Tax Depreciation: Land, Building Basis, and Recovery Periods

References: IRS Publication 946: depreciation

Pronunciation (US): rih-KUV-er-ee PEER-ee-uhd (capitals show stress)

Pronunciation reference: Merriam-Webster