Part VI. Amortization

Each year, you can deduct part of certain capital costs over a fixed period.

Attach any information the Code and regulations may require to make a valid election. See the applicable Code section and regulations for more information.

Caution: If you amortize property, the part you amortize does not qualify for the section 179 expense deduction or for depreciation.

Line 42 Complete line 42 only for those costs you amortize for which the amortization period begins during your tax year beginning in 2025.

Column (a)—Description of costs. Describe the costs you are amortizing. You can amortize the following.

Geological and geophysical expenditures (section 167(h)). You must amortize geological and geophysical expenses paid or incurred in connection with the exploration or development of oil and gas within the United States ratably over a 24-month period, beginning on the midpoint of the tax year in which the expenses were paid or incurred. For a major integrated oil company (as defined in section 167(h)(5)), the costs paid or incurred after December 19, 2007, must be amortized ratably over a 7-year period (a 5-year period for costs paid or incurred after May 17, 2006, and before December 20, 2007).

Pollution control facilities (section 169). You can elect to amortize the cost of a certified pollution control facility over a 60-month period (84 months for certain atmospheric pollution control facilities placed in service after April 11, 2005). See section 169 and the related regulations for details and information required in making the election.

Caution: You can deduct a special depreciation allowance on a certified pollution control facility that is qualified property. However, you must reduce the amount on which you figure your amortization deduction by any special depreciation allowance allowed or allowable, whichever is greater.

Also, a corporation must reduce its amortizable basis of a pollution control facility by 20% before figuring the amortization deduction.

Bond premium (section 171). For individuals reporting amortization of bond premium for taxable bonds acquired before October 23, 1986, do not report the deduction here. See the instructions for Schedule A (Form 1040), line 16.

For taxpayers (other than corporations) claiming a deduction for amortization of bond premium for taxable bonds acquired after October 22, 1986, but before January 1, 1988, the deduction is treated as interest expense and is subject to the investment interest limitations. Use Form 4952, Investment Interest Expense Deduction, to compute the allowable deduction.

For taxable bonds acquired after 1987, you can elect to amortize the bond premium over the life of the bond. In general, you amortize bond premium on a bond by offsetting the stated interest allocable to a tax year with the bond premium allocable to that tax year and report the net amount of stated interest on your return. See section 171 and

Line 41 An automobile meets the requirements for qualified demonstration use if the employer maintains a written policy statement that:

• Prohibits its use by individuals other than full-time automobile salespersons,

• Prohibits its use for personal vacation trips,

Instructions for Form 4562 (2025) 17

Regulations sections 1.171-1 through 1.171-5 for more information. Individuals, also see Pub. 550, Investment Income and Expenses. A bond premium carryforward as of the end of a taxpayer’s final accrual period is treated as a deduction. See Regulations section 1.171-2(a)(4)(i)(C). For an individual, do not report the deduction here. See the instructions for Schedule A (Form 1040), line 16.

Research and experimental expenditures (section 174 and 174A). You can deduct your domestic research or experimental expenditures as current business expenses, elect to capitalize and amortize your domestic research or experimental expenditures in equal amounts over a period of 60 months or more (beginning with the month in which you first realize benefits from the expenditures), or elect to amortize your research or experimental expenditures over a 10-year period. This includes any domestic amounts paid or incurred in connection with the development of software.

You must capitalize and amortize research experimental expenditures attributable to foreign research conducted outside the United States, Puerto Rico, or any territory of the United States paid or incurred during the tax year ratably over a 15-year period beginning with the mid-point of the tax year in which the expenditures were paid or incurred. This includes any foreign amounts paid or incurred in connection with the development of software.

For more information, see sections 174 and 174A, Notice 2023-63, 2023-39 I.R.B. 919, available at IRS.gov/irb/ 2023-39_IRB#NOT-2023-63 , as modified by Notice 2024-12, 2024-5 I.R.B. 616, available at IRS.gov/irb/ 2024-05_IRB#NOT-2024-12 , and Revenue Procedure 2025-28, 2025-38 I.R.B. 393, available at IRS.gov/irb/ 2025-38_IRB#REV-PROC-2025-28 . The cost of acquiring a lease (section 178). If you get a lease for business property, you may recover the cost of acquiring the lease by amortizing it over the term of the lease. The term of the lease for amortization purposes generally includes all renewal options (and any other period for which you and the lessor reasonably expect the lease to be renewed). However, renewal periods aren’t included if 75% or more of the cost of acquiring the lease is for the term of the lease remaining on the acquisition date (not including any period for which you may choose to renew, extend, or continue the lease). See section 178.

Qualified forestation and reforestation costs (section 194). You can elect to deduct a limited amount of qualifying reforestation costs paid or incurred during the tax year for each qualified timber property. You can elect to amortize the qualifying costs that are not deducted currently over an 84-month period. There is no limit on the amount of your amortization deduction for reforestation costs paid or incurred during the tax year.

If you are otherwise required to file Form T (Timber), Forest Activities Schedule, you can make the election to amortize qualifying reforestation costs by completing Part IV of the form. See the Instructions for Form T (Timber) for more information.

• Intangible drilling and development costs (section 263(c))—60 months.

• Mining exploration and development costs (sections 616(a) and 617(a))—10 years.

• Research or experimental expenditures paid or incurred in tax years beginning before January 1, 2022 (section 174(a) prior to amendment by section 13206(a) of P.L. 115-97) and tax years beginning after December 31, 2024 (section 174A(a))—10 years. Amortization for these costs should be reported on line 43.

See section 59(e). For information on making the election, see Regulations section 1.59-1.

Certain section 197 intangibles. The following intangibles must be amortized over 15 years (180 months) starting with the later of (a) the month the intangibles were acquired, or (b) the month the trade or business or activity engaged in for the production of income begins.

• Goodwill.

• Going concern value.

• Workforce in place.

• Business books and records, operating systems, or any other information base.

• A patent, copyright, formula, process, design, pattern, know-how, format, or similar item.

• A customer-based intangible (for example, composition of market or market share).

• A supplier-based intangible.

• A license, permit, or other right granted by a governmental unit.

• A covenant not to compete entered into in connection with the acquisition of a business.

• A franchise, trademark, or trade name (including renewals).

See section 194. Partnerships and S corporations, also see the instructions for line 44.

Optional write-off of certain tax preferences over the period specified in section 59(e). You can elect to amortize certain tax preference items over an optional period. If you make this election, there is no AMT adjustment for these expenditures. The applicable expenditures and the optional recovery periods are as follows.

A longer period may apply to section 197 intangibles leased under a lease agreement entered into after March 12, 2004, to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership). See section 197(f)(10).

Caution: A section 197 intangible is treated as depreciable property used in your trade or business. When you dispose of a section 197 intangible, any gain on the disposition, up to the amount of allowable amortization, is recaptured as ordinary income. If multiple section 197 intangibles are disposed of in a single transaction or a series of related transactions, calculate the recapture as if all of the section 197 intangibles were a single asset. This rule does not apply to section 197 intangibles disposed of for which the adjusted basis exceeds the fair market value.

See section 197. Startup and organizational costs. You can elect to amortize the following costs for setting up your business.

• Business startup costs (section 195).

• Organizational costs for a corporation (section 248).

• Organizational costs for a partnership (section 709). For business startup and organizational costs paid or incurred after September 8, 2008, you can elect to deduct a limited amount of startup or organizational costs for the year that your business begins. You are not required to attach a statement to make this election. Once made, the election is irrevocable. Any cost not deducted currently must be amortized ratably over a 180-month period. The amortization period starts with the month you begin business operations. See Regulations sections 1.195-1, 1.248-1, and 1.709-1.

• Circulation expenditures (section 173)—3 years.

18 Instructions for Form 4562 (2025)

For business startup and organizational costs paid or incurred after October 22, 2004, and before September 9, 2008, you can elect to deduct a limited amount of startup and organizational costs for the year that your business begins. If the election is made, you must attach any statement required by Regulations sections 1.195-1(b), 1.248-1(c), and 1.709-1(c), as in effect before September 9, 2008. Any costs not deducted currently can be amortized ratably over a 180-month period, beginning with the month you begin business.

Note: You can apply the provisions of Regulations sections 1.195-1, 1.248-1, and 1.709-1 to all expenses paid or incurred after October 22, 2004, provided the period of limitations on assessment has not expired for the year of the election. Otherwise, for business startup and organizational costs paid or incurred after October 22, 2004, and before September 9, 2008, the provisions under Regulations sections 1.195-1(b), 1.248-1(c), and 1.709-1(c), as in effect before September 9, 2008, will apply.

For business startup and organizational costs paid or incurred before October 23, 2004, you can elect an amortization period of 60 months or more.

Attach any statements required by the appropriate section and related regulations to Form 4562 by the due date, including extensions, of your return for the year in which the active trade or business begins. If you have both startup and organizational costs, attach a separate statement for each type of cost. If you timely filed your return without making the election, you can still make the election on an amended return filed within 6 months of the due date, excluding extensions, of the return. Enter “Filed pursuant to section 301.9100-2” on the amended return. Creative property costs. These are costs paid or incurred to acquire and develop screenplays, scripts, story outlines, motion picture production rights to books and plays, and other similar properties for purposes of potential future film development, production, and exploitation. You may be able to amortize creative property costs for properties not set for production within 3 years of the first capitalized transaction. These costs are amortized ratably over a 15-year period under the rules of Revenue Procedure 2004-36, 2004-24 I.R.B. 1063, available at IRS.gov/irb/ 2004-24_IRB#RP-2004-36 .

Column (b)—Date amortization begins. Enter the date the amortization period begins under the applicable Code section. The amortizable amount of a pollution control facility is reduced by any special depreciation allowance included on line 14 for that facility.

Column (c)—Amortizable amount. Enter the total amount you are amortizing. See the applicable Code section for limits on the amortizable amount.

Column (d)—Code section. Enter the Code section under which you amortize the costs. For examples, see the Code sections referenced in the instructions for line 42, column (a), earlier.

Column (f)—Amortization for this year. Compute the amortization deduction by:

1. Dividing the amount in column (c) by the number of months over which the costs are to be amortized and multiplying the result by the number of months in the amortization period included in your tax year beginning in 2025, or

2. Multiplying the amount in column (c) by the percentage in column (e).

Line 43 If you are reporting the amortization of costs (other than research or experimental expenditures) that began before your 2025 tax year and you are not required to file Form 4562 for any other reason, do not file Form 4562. Report the amortization directly on the “Other Deductions” or “Other Expenses” line of your return.

Note: The amortization deduction and research or experimental expenditures under former section 174(b) (for amounts paid or incurred in tax years beginning before January 1, 2022) or the dollar amount of research or experimental expenditures for which you elected to amortize over the 10-year period under section 59(e) must be reported on line 43 of Form 4562.

Attach a statement that shows (a) a description of the costs; (b) the date amortization began; (c) the amortizable amount; (d) the applicable Code section; (e) the amortization period; (f) the accumulated amortization; and (g) the amortization amount for this year.

Under section 7.02(2)(f) of Revenue Procedure 2025-28, you may elect to amortize the full amount of the remaining unamortized amount of the amortization deduction of domestic research or experimental expenditures paid or incurred in tax years beginning after December 31, 2021, and before January 1, 2025 (section 174) in the first tax year beginning after December 31, 2024, or amortize this amount ratably over the 2-tax year period beginning after the first tax year beginning after December 31, 2024. To make the election, attach a statement identifying the dollar amount of the remaining unamortized domestic research or experimental expenditures you are electing to amortize per year and report this amount on line 43. If you are electing to accelerate the method of amortization for treatment of domestic research or experimental expenditures paid or incurred in tax years beginning after December 31, 2021, and before January 1, 2025, also include the information required for the “Statement in lieu of a Form 3115” under section 7.02(5)(a)(ii) or 7.02(5)(b)(iii) of Revenue Procedure 2025-28. See Revenue Procedure 2025-28 for more details.

For the amortization deduction of foreign research or experimental expenditures under section 174, attach a statement providing the amount of research or experimental expenditures for which you are amortizing over the 15-year period and report this amount on line 43.

Line 44 Report the total amortization, including amortization for research and experimental expenditures paid or incurred in 2025 and prior years and the allowable portion of forestation or reforestation amortization, on the applicable “Other Deductions” or “Other Expenses” line of your return. For partnerships and S corporations, report the amortizable basis of any forestation or reforestation expenses for which amortization is elected and the year in which the amortization begins as a separately stated item on Schedules K and K-1 (Form 1065 or 1120-S). See the instructions for Schedule K (Form 1065 or 1120-S) for more details on how to report.

Instructions for Form 4562 (2025) 19

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown below.

Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 hr., 44 min. Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 hr., 16 min. Preparing and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 hr., 55 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

20 Instructions for Form 4562 (2025)

Table A—General Depreciation System

Method: 200% declining balance switching to straight line Convention: Half-year

If the recovery period is:

6

Table B—General Depreciation System

Method: 150% declining balance switching to straight line Convention: Half-year

If the recovery period is:

21

Table C—General Depreciation System

Method: Straight line

Convention: Mid-month

Recovery period: 27.5 years

The month in the 1st recovery year the property is placed in service:

Year 1 2 3 4 5 6 7 8 9 10 11 12

1 3.485% 3.182% 2.879% 2.576% 2.273% 1.970% 1.667% 1.364% 1.061% 0.758% 0.455% 0.152%

2–9 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636%

10,12,14,16,18, 20, 22, 24, 26 3.637% 3.637% 3.637% 3.637% 3.637% 3.637% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636%

11,13,15,17,19, 21, 23, 25, 27 3.636% 3.636% 3.636% 3.636% 3.636% 3.636% 3.637% 3.637% 3.637% 3.637% 3.637% 3.637%

28 1.97% 2.273% 2.576% 2.879% 3.182% 3.485% 3.636% 3.636% 3.636% 3.636% 3.636% 3.636%

Table D—General Depreciation System

Method: Straight line

Convention: Mid-month

Recovery period: 31.5 years

The month in the 1st recovery year the property is placed in service:

Year 1 2 3 4 5 6 7 8 9 10 11 12

13,15,17,19, 21, 23, 25, 27, 29, 31 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175%

14,16,18, 20, 22, 24, 26, 28, 30 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174%

32 1.720% 1.984% 2.249% 2.513% 2.778% 3.042% 3.175% 3.174% 3.175% 3.174% 3.175% 3.174%

Table E—General Depreciation System

Method: Straight line

Convention: Mid-month

Recovery period: 39 years

The month in the 1st recovery year the property is placed in service:

Year 1 2 3 4 5 6 7 8 9 10 11 12

1 2.461% 2.247% 2.033% 1.819% 1.605% 1.391% 1.177% 0.963% 0.749% 0.535% 0.321% 0.107%

2–39 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564% 2.564%

40 0.107% 0.321% 0.535% 0.749% 0.963% 1.177% 1.391% 1.605% 1.819% 2.033% 2.247% 2.461%

22

23

Index

A

Percentage of business or investment

use 14 Placed in service date 14 Qualified business use 14 Questions for employers on vehicle

use 16 Recapture of section 179 expense

deduction 16 Recovery period 15 Section 179 expense deduction 16 Special depreciation allowance 13 Type of property 14

Alternative Depreciation System :

General asset accounts 9 Income forecast method 8 Intangible property 8 Listed property 13 Modified Accelerated Cost Recovery

Basis for depreciation 13 Classification of property 12 Conventions 13 Depreciation deduction 13 Placed in service date 13 Recovery period 13 Alternative minimum tax 3 Amortization 17

System (MACRS) 9 Alternative Depreciation

R

Recapture :

Listed property 14, 16 MACRS depreciation 13 Section 179 expense deduction 4, 16 Special depreciation allowance 7 Recordkeeping 3

S

Amortizable amount 19 Amortization deduction 19 Amortization of costs from prior

System 12 General Depreciation System 9 Involuntary conversion 9 Like-kind exchange 9 Other 8 Depreciation methods :

year 19 Amortization of costs in current

year 17 Applicable code section 19 Certain bond premiums 17 Cost of acquiring a lease 18 Creative property costs 19 Date amortization begins 19 Description of costs 17 Forestation and reforestation costs 18 Geological and geophysical

Declining balance 11 Straight line 11 Depreciation tables 21, 22 Depreciation Worksheet 23

E

Election out :

Involuntary conversion 9 Like-kind exchange 9 Special depreciation allowance 7

G

General Depreciation System :

Basis for depreciation 11 Classification of property 10 Conventions 11 Depreciation deduction 12 Determining the classification 10 Placed in service date 11 Recovery period 11

I

Involuntary conversion 9

L

Carryover of disallowed deduction 5 Election 3 Limitations:

Section 179 expense deduction 3

expenditures 17 Optional section 59(e) write-off 18 Pollution control facilities 17 Research and experimental

expenditures 18 Section 197 intangibles 18 Startup and organizational costs 18

Maximum deduction 4 Sport utility vehicle (SUV) 16 Taxable income 5 Threshold cost of property 4 Listed property 16 Recapture 4, 16 Special depreciation allowance 5

C

Conventions :

Half-year 11 Mid-month 11 Mid-quarter 11

D

Like-kind exchange 9 Listed property :

Election out 7 Figuring the allowance 7 Listed property 13 Qualified property 5 Recapture 7

Definitions 2

U

Uniform capitalization rules 13 Unit-of-production method 8

W

Where to find additional

information 2 Who must file 2

Amortization 3 Commuting 3 Depreciation 2 Listed property 3 Listed property - Exceptions 3 Section 179 property 2 Depreciation :

Basis for depreciation 14 Convention 15 Cost or other basis 14 Depreciation deduction 15 Information on vehicle use 16 Method 15 Passenger automobile limits 15

Accelerated Cost Recovery System

Definitions 15 Exception 15 Leasehold property exception 15 Tables 15

(ACRS) 8 Assets placed in service in prior

year 9

24