What was the Accelerated Cost Recovery System (ACRS) used for?

The Accelerated Cost Recovery System (ACRS) was specifically designed as a method of depreciation for tax purposes. It was in effect for property placed in service between 1981 and 1986, allowing businesses to recover the costs of certain capital investments more rapidly than under the previous straight-line depreciation methods. This system aimed to stimulate economic growth by allowing accelerated deductions, which in turn would reduce taxable income in the earlier years of an asset's life.

Under ACRS, different classes of assets had specified recovery periods, which facilitated quicker depreciation. The approach enabled businesses to reinvest the tax savings back into their operations sooner. ACRS laid the groundwork for future depreciation methods, such as the Modified Accelerated Cost Recovery System (MACRS), which is used today.

The other options, while related to taxation, do not pertain to the specific purpose and timeline of ACRS, which solidifies C as the correct answer.