! preciate your property, you cannot

CAUTION claim the special depreciation allow-

ance.

Electing ADS. Although your property may qualify for GDS, you can elect to use ADS. The election must generally cover all property in the same property class you placed in service during the year. However, the election for residential rental property and nonresidential real property can be made on a property-by-property basis. Once you make this election, you can never revoke it.

You make the election by completing line 20 in Part III of Form 4562.

Which Property Class Applies Under GDS?

The following is a list of the nine property classes under GDS.

1. 3-year property.

2. 5-year property.

3. 7-year property.

4. 10-year property.

5. 15-year property.

6. 20-year property.

7. 25-year property.

8. Residential rental property.

9. Nonresidential real property.

See Which Property Class Applies Under GDS? in chapter 4 of Pub. 946 for examples of the types of property included in each class.

What Is the Placed-in-Service Date?

You begin to claim depreciation when your property is placed in service for use either in a trade or business or for the production of income. The placed-in-service date for your property is the date the property is ready and available for a specific use. It is therefore not necessarily the date it is first used. If you converted property held for personal use to use in a trade or business or for the production of income, treat the property as being placed in service on the conversion date. See Placed in Service under When Does Depreciation Begin and End, earlier, for examples illustrating when property is placed in service.

(included in income) as ordinary income up to the amount of the special depreciation allowance previously allowed or allowable. For more information, see chapter 3 of Pub. 946.