7-Year Property Explained
Seven-year property covers office furniture and fixtures, assets in several industry activity classes, and any personal property that has no assigned class life. The class comes from a class life of 10 to under 16 years. It is not a default for building components or structural finishes.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Property with a class life of 10 to under 16 years is 7-year property.
- Office furniture, fixtures, and equipment (class 00.11) is the most familiar example.
- Personal property with no class life defaults to 7 years.
- Seven-year property uses 200% declining balance and is generally bonus-eligible.
- The same equipment can be 5-year property in retail and 7-year property in another activity.
Section 168(e) treats property with a class life of at least 10 but less than 16 years as 7-year property. In Publication 946's tables, class 00.11 — office furniture, fixtures, and equipment that are not structural components, such as desks, files, and safes — has a 10-year class life and a 7-year GDS period.
Several activity classes also produce 7-year recovery. Examples include class 79.0 (recreation, such as bowling alleys and theaters) and class 37.11 (manufacture of motor vehicles). The IRS casino matrix, for instance, places gaming-area electrical hook-ups and removable casino-floor carpet in class 79.0.
The statute also lists specific 7-year items, including railroad track and certain natural-gas gathering lines. Those assignments sit next to the class-life map. They do not move a wall or a roof into the 7-year class.
Office computers are not 7-year property. Information systems are class 00.12, which is 5-year property. Mixing desks and computers on one 7-year line is a common depreciation-schedule error.
Do not use the 7-year default as a place to put unexplained building finishes. The default applies to personal property that has no class life after the asset-class and activity-class checks. Educational information, not tax advice.
Seven-year recovery is still much faster than a 39-year building, so the class shows up often in office and mixed-use studies. The legal work is showing that the item is personal property first. Only then does the class-life table, or the no-class-life default, assign seven years.
The default class
Personal property that is not described in any asset class or activity class is assigned 7 years by statute. The IRS pharmaceutical matrix uses this default for decorative millwork, for example. Before relying on the default, the classification procedure in Publication 946 and Rev. Rul. 2003-81 is to check the asset classes first, then the activity class.
The default is a residual after those checks, not a shortcut. If an item is a structural component under Treas. Reg. §1.48-1(e), it is not personal property and the 7-year default never opens.
When a report uses “no class life — 7-year” as the reason, the narrative should say which tables were checked and why the item is personal property in the first place. A one-line citation to “default 7-year” without that path is the kind of unsupported class the audit guide treats as a quality problem.
How it is depreciated
Seven-year property uses 200% declining balance switching to straight line, normally with the half-year convention, spreading deductions over eight tax years. It is generally eligible for bonus depreciation.
As of October 16, 2026, qualified property acquired after January 19, 2025 is eligible for 100% additional first-year depreciation. Property acquired under a written binding contract entered into on or before that date stays on the earlier phase-down if it is otherwise qualified.
Property required to use ADS is not bonus-eligible. A taxpayer may also elect out of bonus by class for the year. Those elections are made on the return, not in the study.
Why the activity matters
The same piece of equipment can be 5-year property in a retail business (class 57.0) and 7-year property in a manufacturing business, depending on the activity class. For leased property, the lessor generally uses the activity class of the lessee's use.
Recreation property in class 79.0 is a frequent 7-year bucket in casinos and theaters. Removable carpet in a gaming area can be 7-year in that matrix while similar carpet in a hotel corridor is analyzed under different facts. Exporting the casino row to an office is a misuse of the matrix.
Primary-use facts also matter when one building houses more than one activity. The classification follows the use of the asset, not the owner’s industry label on the letterhead.
Office interiors
Desks, files, and movable partitions that are not structural components are the core of class 00.11. Built-in millwork that relates to the operation of the building can stay with the 39-year structure.
There is no IRS office-building matrix in Publication 5653. Office finishes are classified from the regulation, the Whiteco factors, and the class-life tables — not from a restaurant or retail row. Movable systems furniture is the usual 00.11 fact pattern. Floor-to-ceiling partitions that divide rooms and relate to the operation of the building are listed as structural components in §1.48-1(e)(2).
Recapture
Seven-year personal property is generally §1245 property. Gain on sale is ordinarily recaptured as ordinary income to the extent of depreciation taken.
That character difference is the same trade-off described for 5-year property. Faster recovery now can mean ordinary income later. Model the exit with your CPA rather than treating every 7-year dollar as free timing.
Sources
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- 2IRS Publication 946 — How To Depreciate Property (2025)(opens in a new tab)
Appendix B reproduces the Rev. Proc. 87-56 class lives.
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- 4IRS Publication 5653 — Cost Segregation Audit Techniques Guide (rev. 2-2025)(opens in a new tab)
Written for IRS examiners. The guide states it is not an official pronouncement of law and cannot be cited as authority. It predates the July 2025 law.
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