For U.S. tax purposes, office and commercial furniture is 7-year property under MACRS, the IRS's standard depreciation system — though in practice many businesses deduct much or all of a furniture purchase in year one using Section 179 expensing or bonus depreciation instead of spreading it over the schedule. For your own books, most operators depreciate furniture straight-line over five to ten years of useful life.

Now the disclaimer we mean sincerely: we've spent fifteen years supplying FF&E, not filing returns on it. We know this material because depreciation schedules shaped every hotel proforma we ever budgeted against — but your CPA files your taxes, and the incentive rules in particular change with tax legislation. Use this to walk into that conversation informed.

What depreciation class is furniture for taxes?

Under MACRS (Modified Accelerated Cost Recovery System), furniture and fixtures — desks, chairs, tables, casegoods, shelving — are 7-year property. Using the standard method (200% declining balance, half-year convention), the deduction percentages run roughly: year one 14.29%, year two 24.49%, year three 17.49%, then 12.49%, 8.93%, 8.92%, 8.93%, and a final 4.46% in year eight (the half-year convention spreads seven years of depreciation across eight tax years).

Note what's not in this class: the building itself and permanently attached improvements (built-in millwork, site-built banquettes) depreciate as real property over decades — 39 years for nonresidential. This is why the FF&E-versus-leasehold-improvement line matters so much at tax time, and it's half the reason the term FF&E exists as a category at all; the definitional boundaries are in what is FF&E.

What are Section 179 and bonus depreciation?

The two accelerators that usually swallow the 7-year schedule in practice:

  • Section 179 lets a business elect to expense qualifying equipment purchases — furniture very much included — in the year placed in service, up to an annual limit (the cap has been in the low millions of dollars in recent years, with a phase-out for very large total purchases). It requires taxable income to deduct against and is elected asset by asset.
  • Bonus depreciation allows an additional first-year deduction on qualifying property; recent federal tax legislation restored 100% first-year bonus depreciation for most equipment. Unlike Section 179, it isn't capped and can create a loss.

Practical upshot: a profitable restaurant buying $80,000 of dining furniture can very likely deduct the entire amount in year one under current rules. Whether it should — versus spreading deductions into future higher-income years — is precisely the strategy question your CPA earns their fee on. Both regimes' details move with legislation, so verify the current-year numbers rather than trusting any article's snapshot, including ours.

How does book (straight-line) depreciation work?

Your internal books and any lender-facing statements typically use straight-line: (cost minus salvage value) divided by useful life. Common useful-life conventions for commercial furniture run five to ten years — hotels often carry FF&E at seven, restaurants five to seven, offices seven to ten. Salvage value honesty from someone who has liquidated dining rooms: used commercial furniture resells for 10–30% of original cost on a good day, and heavily used seating is often effectively zero after hauling costs. Most operators just book salvage at zero and treat any liquidation proceeds as a pleasant surprise.

Can we do a worked example?

A cafe buys 60 chairs and 20 tables for $30,000, placed in service this year.

  • Straight-line, books: $30,000 over 7 years, zero salvage = about $4,286 of book depreciation per year.
  • MACRS, no elections: year one 14.29% = $4,287; year two 24.49% = $7,347; the rest per the schedule above.
  • Section 179 or bonus (if elected and qualified): up to the full $30,000 deducted in year one, cutting current-year taxable income by the whole purchase.

Same furniture, three legitimate answers — which is really the lesson: depreciation method is a decision, made annually, with your tax professional.

What records should I keep from the purchase?

Here's where we have strong opinions, because good procurement paperwork is good depreciation paperwork:

  • Itemized invoices, not lump sums. "Restaurant package — $85,000" is a headache; line items let your accountant assign classes correctly and prove basis.
  • Landed cost components. Freight, delivery, and installation are generally capitalized into the asset's basis — so keep those invoices with the furniture invoice, not in a separate shoebox. (Budgeting those costs properly in the first place is the FF&E budget guide.)
  • In-service dates. Depreciation starts when the asset is placed in service — the dining room opening, not the PO date. On phased projects the dates differ by area.
  • The FF&E schedule itself. The same item-by-item schedule a procurement process produces (this document) becomes the fixed-asset register with almost no extra work. Buy organized, depreciate organized.

And when buying an existing business: the purchase price allocated to FF&E (agreed on Form 8594 in an asset sale) sets your depreciable basis — worth negotiating with eyes open, as covered in the what-is-FF&E guide.

What happens when I sell, trade in, or dump depreciated furniture?

The end-of-life accounting, in plain terms:

  • Selling above book value triggers recapture. If you fully expensed $30,000 of furniture in year one and later liquidate it for $6,000, that $6,000 is generally taxable income (depreciation recapture) — the IRS giveth the deduction and taketh back the gain. Not a reason to avoid accelerated depreciation; just a reason the liquidation check isn't free money.
  • Disposal below book value produces a deductible loss. Renovating in year four with assets still carrying book value? The remaining basis on discarded furniture is generally written off in the disposal year. This is why the fixed-asset register should actually get updated when the dumpster leaves — abandoned assets quietly carried on the books for years are an audit's favorite snack.
  • Donations need paperwork proportional to the claim. Donating usable furniture to a charity can yield a deduction (generally fair market value for appreciated-use scenarios, with appraisal requirements above certain thresholds) — and, from the procurement side, donation often beats paying haulage on furniture liquidators won't touch. Schools and shelter programs take good commercial furniture gladly.
  • Trade-ins are now just sales. Like-kind exchange treatment for equipment ended years ago; a trade-in allowance is treated as sale proceeds against the old asset and cost basis in the new one.

Every one of these lands cleaner when the original purchase was documented item by item — which is our recurring sermon, and your CPA's too.

Does depreciation change what furniture I should buy?

It softens the price gap between grades more than people realize. If year-one expensing is available, the after-tax cost difference between the $80 chair and the $160 commercial chair shrinks meaningfully at typical business tax rates — while the service-life difference (eighteen months versus eight years in real commercial duty) doesn't shrink at all. Tax treatment quietly subsidizes buying the durable thing; the durability math itself lives in what commercial grade actually means.

One more planning note from hotel land: brands and lenders expect an ongoing FF&E reserve — commonly around 4% of gross revenue — precisely because furniture wears out on a schedule whether or not the books acknowledge it. Depreciation is the accounting echo of a physical fact.

The short version

Furniture is 7-year MACRS property; Section 179 and bonus depreciation usually let profitable businesses deduct much or all of it in year one; books run straight-line over five to ten years with honest (low) salvage assumptions; and the paperwork from a well-run purchase doubles as the fixed-asset register. Confirm current-year limits with your CPA — the rules move.

If you're building the purchase side of this — an itemized, landed-cost furniture package your accountant will actually thank you for — send us your list. We'll price it properly broken out, which is a small kindness to your future tax appointment.