Appendix B The Table of Class Lives and Recovery Periods has twosections. The first section, Specific Depreciable Assets Used InAll Business Activities, Except As Noted:, generally listsassets used in all business activities. It is shown as Table B-1. Thesecond section, Depreciable Assets Used In The FollowingActivities:, describes assets used only in certain activities.It is shown as Table B-2. How To Use the Table Use the tables in the order shown below to determine the recoveryperiod of your depreciable property. Table B-2.Check Table B-2 to find the activity in which the property is beingused. If the activity is described in Table B-2, read the text (ifany) under the title to determine if the property is included in thatasset class. If it is, use the recovery period shown in theappropriate column following the description. If the activity is notdescribed in Table B-2 or if the activity is described but theproperty either is not included in or is specifically excluded fromthat asset class, turn to Table B-1. Table B-1.If you cannot use a recovery period from Table B-2, check Table B-1for a description of the property. If it is described in Table B-1,use the recovery period shown in this table. ERROR MSGProperty not in either table.ERROR MSGIf the property is not included in either table, it generally has arecovery period of 7 years for GDS or 12 years for ADS. Residentialrental property and nonresidential real property have their ownrecovery periods for both GDS and ADS. Example 1.Richard Green is a paper manufacturer as described in asset class26.1, Manufacture of Pulp and Paper. Gyor hotelsDuring the year, hemade substantial improvements to the land on which his paper plant islocated. He reads the headings and descriptions in Table B-2 and findsthat asset class 26.1 specifically includes land improvements, theland improvements have a 13-year class life and a 7-year recoveryperiod for GDS. If he elects to use the ADS method, the recoveryperiod is 13 years. Example 2.Aarhus hotelsSam Plower produces rubber products as described in asset class30.01 Helsingborg luxury hotelsManufacture of Rubber Products. During the year, hemade substantial improvements to the land on which his rubber plant islocated. Reading the headings and descriptions in Table B-2, Sam findsthat asset class 30.01 does not include land improvements. Sam mustnow read Table B-1. He finds land improvements under asset class 00.3.The land improvements have a 20-year class life and a 15-year recoveryperiod for GDS. If he elects to use the ADS method, the recoveryperiod is 20 years. Table B-1 Table B-2 Table B-2 Table B-2 Table B-2 Table B-2 Table B-2 Table B-2 Table B-2 Table B-2