Accelerated depreciation for servers and GPUs
How U.S. federal tax depreciation works for the GPU servers you buy, with each rule linked to the IRS or the statute. General information, not tax advice. Talk to your tax advisor about your situation.
The rules at a glance
| Rule | What it does | 2025 and 2026 |
|---|---|---|
| MACRS, 5-year class | Spreads the cost over six tax years on a 200% declining balance schedule | Computers and peripheral equipment are 5-year property |
| Bonus depreciation (168(k)) | Deducts a percentage of the basis in year one, unless you elect out | 100% if acquired after Jan. 19, 2025; 40% (2025) or 20% (2026) if acquired earlier |
| Section 179 | Expenses the cost you elect, within dollar and income limits | $2,500,000 (2025) and $2,560,000 (2026), reduced above $4,000,000 and $4,090,000 |
| Recapture (1245) | Taxes gain on a sale as ordinary income up to the depreciation taken | Includes bonus and section 179 amounts |
| State conformity | Each state decides whether to follow the federal rules | Many states decouple from bonus depreciation |
Sources: IRS Publication 946, Public Law 119-21, Notice 2026-11, Rev. Proc. 2025-32.
The order they apply in
Section 179 first, then bonus, then MACRS. Start from the cost, times the business-use share. Subtract any section 179 amount you elect, take bonus depreciation on what is left unless you elected out, and depreciate the rest with the IRS tables. The MACRS calculator follows the same order.
MACRS is the accelerated part. For 5-year property under the half-year convention, the IRS table gives 20%, 32%, 19.2%, 11.52%, 11.52%, 5.76% of the basis over six tax years.
Placed in service sets the year. A server is placed in service when it is ready and available for its use, not when it is ordered or paid for. One that ships in December and is racked in January is generally a next-year asset.
One schedule, three ways
$500,000 of servers placed in service in May 2026, the owner's only property that year, no section 179. The total is the same each way; the timing moves.
| Tax year | Elected out | 20% bonus | 100% bonus |
|---|---|---|---|
| 2026 | $100,000 | $180,000 | $500,000 |
| 2027 | $160,000 | $128,000 | $0 |
| 2028 | $96,000 | $76,800 | $0 |
| 2029 | $57,600 | $46,080 | $0 |
| 2030 | $57,600 | $46,080 | $0 |
| 2031 | $28,800 | $23,040 | $0 |
20% applies to property acquired before January 20, 2025 and placed in service in 2026; 100% to property acquired after January 19, 2025. Publication 946, Table A-1.
The guides
| Guide | What it covers |
|---|---|
| Bonus depreciation 2026 | Which percentage applies by acquisition date, what qualifies, used equipment, and electing out. |
| Section 179 | The 2025 and 2026 limits, the business income limit, and the rules for lessors and trusts. |
| MACRS for computers | Why servers are 5-year property, the half-year and mid-quarter conventions, and the IRS tables. |
| Bonus vs section 179 | The two first-year rules side by side, and one purchase scheduled three ways. |
| Depreciation recapture | What section 1245 does when you sell depreciated servers, with a worked example. |
| Lease vs buy | The owner depreciates: when a lease is a true lease, and when it is treated as a purchase. |
| State conformity | Why state depreciation can differ from federal, with California and Oregon. |
| Book vs tax | Useful lives in public filings next to the MACRS schedule, and why the two differ. |
| MACRS calculator | Year-by-year tax depreciation for GPU servers from the IRS MACRS tables, with bonus depreciation and section 179 amounts you enter. |
Questions about depreciation
- Does having someone else run my servers change how they are depreciated?
- Depreciation follows who owns the equipment and how it is used, not who operates it.
- Can I depreciate GPU servers I rent out?
- If you own them, yes: renting out capacity does not move ownership. Section 179 is narrower, because property held only to produce income does not qualify unless renting is your trade or business.
Planning to buy GPU servers?
- A call with our CTO about what you need
- Ballpark costs and timelines for your budget
- A straight answer if it’s not a fit
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