 Alright, so which depreciation system? GDS or ADS applies. So your use of either the general depreciation system, otherwise known as the GDS, or the alternative depreciation system, the ADS, to depreciate property under makers determines what depreciation method and recovery period you use. You must generally use GDS, unless you are specifically required by law, to use ADS or you elect to use ADS. Like the default then is going to be the GDS general depreciation system, unless you're required to deviate that or make an election to do so. If you place your property in service in 2022, complete part three of form 4562 to report depreciation using makers. Complete section B of part three to report depreciation using GDS and complete section C of part three to report depreciation using ADS. If you place your property in service before 2021 and are required to file form 4562, report depreciation using either GDS or ADS on line 17 of part three. Okay, required use of ADS. You must use ADS. This is the deviation when we have to use ADS, would that be the case? You must use ADS for the following property, non-residential real property, residential real property, and qualified improvement property held by the electing real property trade or business. So that's going to be as defined in section 163 J7B of the internal revenue code. For more information, see the revenue procedure 2019-8 on page 347 of internal revenue bulletin 2019-3 available at the IRS website. So any property with a recovery period of 10 years or more under GDS held by an electing farming business, so farming also have these kind of exceptions that could be applied as defined in section 163 J7C of the internal revenue code. For more information there, you can see the revenue procedure 2019-8. Obviously, we're going to put some more of our focus on some of the more normal calculations for most people. So we won't going to deviate too much on a lot of the special kind of circumstances, but you can of course research those on your own. Any tax exempt use property, any tax exempt bond, financed property, all property used predominantly in a farming business and placed in service in any tax year doing which an election not to apply the uniformed capitalism rules to certain farming costs is in effect. Any property imported from a foreign country for which an executive order is in effect because the country maintains trade restrictions or engages in other discriminatory acts. So any tangible property used predominantly outside the United States during the tax year and any listed property used 50% or less in a qualified business used during the tax year discussed later. All right, caution. If you are required to use ADS to depreciate your property, you cannot claim any special depreciation allowance. We talked about special depreciation in a prior presentation or two discussed in chapter three for property. So electing ADS, so again this would be deviating from the general stamp standard to the ADS doing it this time not because you're required to but because you're electing to do that. Although your property may qualify for GDS, you can't elect to use ADS. The election must generally cover all property in the same property class that you placed in service during the year. So you got it. You can't you have to kind of be somewhat uniform within that year. However, the election for residential rental property and non-residential real property can be made on a property by property basis. Once you make this election, you can never revoke it, which kind of makes sense because we're trying to depreciate something over its useful life. So you would think that you're going to kind of lock into it and you can't really kind of deviate from depreciation method once you're once you're going. So you want to make sure that you make any elections you want to make in the first year generally. You make the election by completing form four five six two part three line 20. So which property class applies under GDS? The following is a list of nine property classifications under GDS and examples of the types of property included in each class. So note this is a little bit different. Once again, then you might be used to if you do accounting for generally accepted accounting principles because for the tax code, they're going to be much more strict in terms of this is the classes that you need to be classifying things under. Because again, the incentives are different with regards to taxes and people have an incentive to try to increase the the deductions upfront for the taxes. So they kind of have to be more strict in terms of what you can do with them. So so these property classes are also listed under column A in section B of part three of form four five six two. So you could check them out there for reference when you're working on taxes. Take a look at the form four five six two to look at the classes for detailed information on property classes. See appendix B table of class lives and recovery periods in this publication. So you've got then one you've got the three year property. So three year property includes a tractor units for over the road use B any racehorse over two years old when placed in service. So I like to deal with that horse flesh myself at the old track. In any case see any other horse other than a racehorse over 12 years old when placed in service qualified rent to own property defined later. And then we have five year property five year property automobiles taxis buses and trucks any qualified technical equipment office machinery such as typewriters calculators and copiers. So this is a common property type number of property years. So then we have any property used in research and experimentation and breeding cattle and dairy dairy cattle appliances carpets furniture etc. used in a residential rental real estate activity certain geothermal solar and wind energy property and finally any machinery equipment other than any grain bin cotton ginning asset fence or other land improvement used in a farming business and placed in service after 2017 in tax years ending after 2017 the original use of the property must begin with you after 2017. Then we have another common categorization of seven year property that includes office furniture and fixtures such as desks files and safes. We have used agricultural machinery and equipment placed in service after 2017 grain bins cotton ginning assets or fences used in farming business but no other land improvements. You got railroad track any property that does not have a class life and has not been designated by law as being in any other class. Now you can see obviously the IRS has this need to try to be more stringent about classifications here so that people don't kind of take advantage and try to get more deductions you know upfront and whatnot but clearly they can't list every single thing imaginable so you've got this kind of bucket group that you would expect to be happening in some cases you might have that gray area where you're trying to determine if something should be three year five year seven year and sometimes you can find that directly in the code here in the publications and whatnot and sometimes you would need to do more research possibly on that so so in any case certain motor sports entertainment complex property defined later and finally any natural gas gathering line placed in service after April 11th 2005 seeing natural gas gathering line and electric transmission property later