Which type of property cannot be depreciated under MACRS?

Under the Modified Accelerated Cost Recovery System (MACRS), depreciation is a method used to recover the cost of certain types of property over a specified useful life. However, not all property qualifies for depreciation under this system.

Assets with an unlimited useful life, such as land, are not depreciable under MACRS. This is because depreciation is designed to account for the wear and tear on physical assets over time, and properties that do not wear out or depreciate in value due to usage—like land—do not meet the criteria for depreciation. As a result, those properties are excluded from the MACRS framework.

Other types of properties, such as rental properties, commercial equipment, and investment properties, typically have defined useful lives and can be depreciated, making them eligible under MACRS guidelines. Hence, the correct choice regarding what type of property cannot be depreciated is indeed those assets with an unlimited useful life.