The difference between the present value of the double declining method of depreciation and that of the economic depreciation or the straight-line method of depreciation
, multiplied by the tax rate, is the tax advantage of the declining balance method.
Ordinarily, the cost of real, or section 1250, property is recovered over lengthy periods (27.5 and 39 years for residential and nonresidential property, respectively), using the straight-line method of depreciation
. Personal, or section 1245, property is recovered over considerably shorter periods (5, 7 or 15 years), and employs accelerated or "front-end loaded" methods of depreciation, such as 200% or 150% declining balance.