Furniture, Fixtures, and Equipment (FF&E): Definition, Useful Life and Depreciation

FF&E stands for furniture, fixtures and equipment. It covers the movable items a business uses to operate but that are not part of the building itself: desks, chairs, filing cabinets, shelving, safes, phones, computers, copiers, display racks and, in a hotel or restaurant, the beds, tables and kitchen equipment. In accounting, FF&E is a class of fixed assets (long-term tangible assets). You record it at cost on the balance sheet and depreciate it over its useful life instead of expensing it on the day you buy it. For US federal tax, office furniture and fixtures are 7-year property and computers 5-year property, per IRS Publication 946.

That is the short answer. The rest of this page covers what counts as FF&E and what doesn't (a water heater, for instance, usually doesn't). It also covers whether furniture is an asset or an expense, the useful life of furniture and fixtures for book and tax purposes, and how depreciation works, with a worked $50,000 example and the 2026 Section 179 and bonus depreciation rules. It is general information as of September 2026, not accounting or tax advice for your business.

What FF&E Means

The term is a label for a group of assets. It is not a legal category, and people use it in three slightly different ways.

In accounting, "furniture and fixtures" or "furniture, fixtures and equipment" is a line in the fixed-asset register and often a separate line in the property, plant and equipment note. It groups assets with similar lives so they can be depreciated together. See the entry on property, plant and equipment for how that larger category is reported.

In tax, the IRS uses nearly the same words for a formal asset class. Asset class 00.11 in Table B-1 of Publication 946 is titled "Office Furniture, Fixtures, and Equipment." It "includes furniture and fixtures that are not a structural component of a building," such as "desks, files, safes, and communications equipment." Its class life is 10 years and its recovery period under the General Depreciation System (GDS) is 7 years.

In real estate and hospitality, FF&E is a budget and valuation term. A hotel's FF&E budget covers everything a guest or employee can move, and hotel management agreements commonly provide for an FF&E reserve for periodic replacement. When a property is appraised or sold, FF&E is usually valued separately from the land and building because it wears out much faster.

In all three senses, the test is the same. Could you unbolt it and take it with you without damaging the building? Desks, chairs, freestanding shelving, computers and a reception counter that isn't built in are FF&E. Walls, wiring, plumbing, HVAC ductwork and built-in elements usually belong to the building. British usage says "fixtures and fittings" for much the same list.

Is Furniture an Asset or an Expense?

Furniture a business buys to use for more than a year is an asset, specifically a tangible, non-current fixed asset. The purchase goes on the balance sheet and the cost is spread over the years it is used. Publication 527 says it bluntly for landlords: "You can't simply deduct your mortgage or principal payments, or the cost of furniture, fixtures, and equipment, as an expense."

There are three exceptions.

1. Small purchases. Most businesses set a capitalization threshold and expense anything cheaper. For tax, the IRS de minimis safe harbor lets you deduct items up to a fixed amount per invoice or per item, if you elect it on your return and follow the same policy in your books.
2. Furniture held for sale. For a furniture retailer, the sofas on the showroom floor are inventory, a current asset, not a fixed asset. The same chair can be FF&E in one business and inventory in another.
3. Personal furniture. Furniture in your own home is not a business asset and can't be depreciated, unless part of the home is used for business or rented out.

The IRS's tangible property regulations FAQ sets the amounts. Without an applicable financial statement (an audited or SEC-filed statement), you can deduct items up to $2,500 per invoice or item. With one, the limit is $5,000. The rule itself is in Treasury Regulation 1.263(a)-1(f)-1). A $1,800 desk can be expensed under the $2,500 limit. A $40,000 office fit-out billed as one invoice cannot, but if the invoice itemises each piece, the per-item test applies instead.

What Is FF&E in Fixed Assets?

In a fixed-asset register, FF&E is one asset class alongside land, buildings, leasehold improvements, vehicles, and machinery and equipment. Each class carries a default useful life and depreciation method, so a new purchase is tagged once and depreciates automatically. The decision tree below is what an accountant runs, often without thinking about it, when an invoice arrives:

Grouping matters because the classes behave differently. Land is never depreciated. Buildings are depreciated over decades. FF&E and equipment are written off over 5 to 7 years for tax. If you misfile a $30,000 set of cubicles as a building improvement, you depreciate it over 39 years (or 15 as qualified improvement property) instead of 7. If you misfile a built-in HVAC unit as equipment, the IRS can disallow the faster write-off. For the underlying rules on what gets capitalized, see capitalization.

Useful Life of Furniture and Fixtures: Book vs Tax

The useful life of furniture and fixtures depends on which set of books you are keeping, and companies routinely keep two.

For financial statements (GAAP books), useful life is management's estimate of how long the asset will actually serve the business. There is no mandated number. A law firm might use 10 years for solid wood desks, and a startup 5 years for flat-pack furniture it expects to replace. The estimate should be reasonable, applied consistently and revisited if circumstances change. Straight-line depreciation, the same amount each year, is the usual method for FF&E on book statements. For how companies estimate and revise lives, see useful life estimations.

For the federal tax return, useful life is not an estimate. It is the MACRS recovery period assigned to the asset's class, which you look up in Publication 946:

Two things in that table catch people out. First, the business activity can change the class. Publication 946 walks through a retail store whose desk stays in class 00.11 (7 years) while its cash register falls under class 57.0, distributive trades and services, with a 5-year recovery period. Second, furniture in a residential rental is 5-year property, not 7. Publication 527 lists "furniture used in rental property" and appliances at 5 years under GDS.

The Alternative Depreciation System (ADS) uses longer periods, such as 10 years for office furniture. It is required for some property, including tangible property used mainly outside the United States and tax-exempt use property, and any business can elect it. The differences between the two systems are covered in GDS vs ADS.

Is a Water Heater FF&E? Fixtures vs Building Components

Usually not. A water heater that serves a building's plumbing is part of the building, not furniture or equipment. Publication 527 lists a water heater under plumbing in its table of improvements to rental property. Its recovery-period table puts "structural components such as furnaces, waterpipes, venting, etc." with the building itself: 27.5 years for residential rental property and 39 years for nonresidential real property. Wiring, built-in cabinetry, flooring and HVAC generally follow the same logic.

The dividing line is the one in the 00.11 definition: fixtures "that are not a structural component of a building." A freestanding display case is FF&E. A built-in wall of shelving usually isn't. Two practical consequences follow:

• Faster write-offs depend on the split. A cost segregation study exists to find the building costs that are really personal property (5- or 7-year) or land improvements (15-year), because those depreciate far faster than a 39-year shell.
• Interior improvements have their own class. Qualified improvement property is an improvement to the interior of a nonresidential building made after the building was first placed in service, excluding enlargements, elevators and escalators, and the internal structural framework. It is 15-year property, which sits between FF&E and the building.

So for the question "what type of asset is a water heater, furniture, fittings?": furniture and freestanding fittings are FF&E, a movable fixed asset depreciated over 5 to 7 years for tax. A water heater tied into the plumbing is a building component depreciated with the building.

FF&E Depreciation: A Worked Example

In March 2026, a small accounting firm spends $50,000 on desks, chairs, filing cabinets and conference furniture. On its financial statements, it depreciates the furniture straight-line over 7 years with no salvage value, which is $7,143 a year. On its tax return, the furniture is 7-year MACRS property, depreciated with the 200% declining balance method and the half-year convention. Publication 946's Table A-1 gives the percentages: 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, 8.92%, 8.93% and 4.46%. The half-year convention stretches 7-year property across eight tax years.

For tax, that works out to $7,145 in year one, $12,245 in year two, then $8,745, $6,245, $4,465, $4,460, $4,465 and $2,230. The totals are identical at $50,000. Only the timing differs, and that timing gap is the "temporary difference" behind deferred tax on a balance sheet. The legacy version of this page printed a 7-year MACRS schedule that added up to about $39,500 of the $50,000 cost. The percentages above come straight from the IRS table.

This comparison assumes the firm opts out of bonus depreciation. By default, it wouldn't.

Section 179 and Bonus Depreciation for FF&E in 2026

Most businesses buying FF&E in 2026 can deduct the full cost in the first year, by either of two routes.

Bonus depreciation. Publication 946 says the One Big Beautiful Bill Act of 2025 "reinstated the 100% special depreciation allowance for certain qualified property acquired and placed in service after January 19, 2025." New and most used FF&E qualifies, because its recovery period is 20 years or less. It applies automatically unless you elect out, and the election is made for a whole class of property, such as all 7-year property placed in service that year. For the first tax year ending after January 19, 2025, you can choose 40% instead.

Section 179. You can instead elect to expense qualifying property up to a dollar cap. For tax years beginning in 2026, Revenue Procedure 2025-32 sets the cap at $2,560,000. The cap shrinks dollar for dollar once total qualifying purchases exceed $4,090,000. Section 179 is also limited to your taxable income from the active conduct of a trade or business, with any excess carried forward. That makes bonus depreciation the fuller route for a loss-making year.

Taking the whole deduction in year one is not free money. It is timing. The deduction is worth your marginal tax rate now instead of spread over eight years. The price is that the furniture then has a tax basis of zero, which matters when you sell it.

Net Book Value and Selling FF&E

Net book value is cost minus accumulated depreciation. After three years, the firm's books show 50,000 − (3 × 7,143) = $28,571. Its tax basis, if it elected out of bonus depreciation, is 50,000 − 28,135 = $21,865. If it took 100% bonus depreciation, the tax basis is $0.

Now suppose the firm moves offices early in year four and sells the furniture for $15,000. To keep it simple, ignore the partial-year deduction in the year of sale.

• Books: $15,000 minus $28,571 is a $13,571 loss.
• Tax, regular MACRS: $15,000 minus $21,865 is a $6,865 loss. A loss on business property held more than a year is a Section 1231 loss, which is ordinary if your Section 1231 results net to a loss for the year.
• Tax, after 100% bonus: $15,000 minus $0 is a $15,000 gain. All of it is Section 1245 recapture, taxed as ordinary income, because it doesn't exceed the depreciation taken. See Section 1245 recapture.

Neither net book value nor tax basis is the market value. Used office furniture often sells for well below its cost, which is why FF&E rarely produces a large gain unless it was written off immediately. The depreciation itself is reported each year on Form 4562.

Leasing FF&E Instead of Buying

Many businesses lease furniture and equipment rather than buy. The legacy version of this page said operating leases stay off the balance sheet. That stopped being true for US GAAP when ASC 842 replaced the old leasing standard. Under ASC 842, a lessee records a right-of-use asset and a lease liability for most leases. The exception is short-term leases of 12 months or less, which companies may elect to leave off the balance sheet (ASC 842-20-25-2, as summarised in Deloitte's ASC 842 roadmap). A finance lease still front-loads expense much as buying does. An operating lease produces a single straight-line lease cost.

For tax, a true lease generally means the business deducts rent as it is paid and the lessor claims the depreciation. A "lease" that works like a purchase is generally treated as a purchase, and the lessee depreciates the FF&E. Leasing preserves cash. Owning, with 100% bonus depreciation available in 2026, front-loads the deduction.

FAQ

What does FF&E stand for?

FF&E stands for furniture, fixtures and equipment: the movable items a business uses to operate, such as desks, chairs, shelving, safes, phones and computers. In accounting it is a fixed-asset class. In hospitality and real estate it is also a budget and reserve category for items that wear out faster than the building.

What is the useful life of furniture and fixtures?

For federal tax, office furniture and fixtures are 7-year MACRS property (asset class 00.11, class life 10 years). Furniture and appliances used in a residential rental are 5-year property. For financial statements, the useful life is management's own estimate, commonly somewhere between 5 and 10 years, usually depreciated straight-line.

Is office furniture depreciated or expensed?

It is depreciated if it is capitalized. Items under the IRS de minimis threshold ($2,500 per invoice or item without audited statements) can be expensed immediately if you elect the safe harbor. Larger purchases can also be written off in the first year through 100% bonus depreciation or Section 179 in 2026.

Is FF&E part of property, plant and equipment?

Yes. FF&E is one class within property, plant and equipment (PP&E) on the balance sheet, alongside land, buildings, machinery and vehicles. Companies often show it as a separate line in the PP&E note because it has shorter useful lives than buildings.

Sources

• IRS, Publication 946, How To Depreciate Property (for 2025 returns) — Table B-1 asset class 00.11 "Office Furniture, Fixtures, and Equipment" (10 / 7 / 10), 00.12 information systems (6 / 5 / 5), 00.13 data handling (6 / 5 / 6), automobiles; the retail store example with class 57.0; Table A-1 7-year percentages; 100% special depreciation allowance after January 19, 2025; qualified improvement property; 27.5 and 39-year real property
• IRS, Publication 527, Residential Rental Property — "can't simply deduct... the cost of furniture, fixtures, and equipment"; Table 1-1 improvements including the water heater; Table 2-1 recovery periods (rental furniture and appliances 5 years; structural components 27.5 years)
• IRS, Tangible Property Final Regulations FAQ — de minimis safe harbor: $2,500 without an applicable financial statement, $5,000 with one, per Notice 2015-82
• eCFR, 26 CFR 1.263(a)-1(f)-1) — the de minimis safe harbor election
• IRS, Internal Revenue Bulletin 2025-45 (Rev. Proc. 2025-32) — the 2026 Section 179 limit of $2,560,000 and phase-out threshold of $4,090,000
• Deloitte, Roadmap: Leasing, 8.2 Policy Decisions That Affect Lessee Accounting — ASC 842-20-25-2 short-term lease election