Which recovery category applies to nonresidential property under MACRS?

The correct recovery category for nonresidential property under the Modified Accelerated Cost Recovery System (MACRS) is 39 years. This classification is specifically designed for nonresidential real property, which encompasses buildings and structures utilized for commercial purposes.

In the MACRS framework, different types of property have varying recovery periods that influence the depreciation expense a taxpayer can claim. Nonresidential real properties have a relatively long depreciation period of 39 years, reflecting the nature of the investment and the expected useful life of the property.

Other recovery categories exist for different types of property. For example, 15 years often pertains to certain improvements to real property or specific types of qualified property, while 5 years applies to more transient assets such as machinery and certain equipment. The 27½ year period is specifically used for residential rental property, which further delineates the different classifications within real property types under MACRS.

Thus, recognizing the specific recovery period that corresponds to nonresidential property is crucial for accurate tax preparation and accounting.