Posted by Penny on February 12, 2008 at 20:37:29:
I do commercial, so I have 39 year depreciation on the brain. You piqued my interest, so I went back and looked at form 4592 again. Lines 19 h & i is where the depreciations are actually called out for residential and non-residential aas 27.5 and 39 years, respectively. It’s not real clear from reading pub 946 what the commercial depreciation is.
I stand corrected.
Depreciation Rates on Multi-Unit Residential - Posted by John Davidson
Posted by John Davidson on February 06, 2008 at 19:43:04:
I’m quite aware that the depreciation rate for multi-unit residential property is 27.5 years from the time of purchase.
I’m also aware that the depreciation rate for building improvements is 27.5 years from the time they are made.
What will the depreciation rate be for personal property like washer/dryer, stoves, refrigerators, etc.?
What will the depreciation rate be for landscaping like driveways, sidewalks, trees, etc.?
Cost Segregation Study! - Posted by Truth Teller
Posted by Truth Teller on February 23, 2008 at 05:43:54:
Anyone looked into COST Segregation on MULTI FAMILY.
Basically as I understand it An engineer comes in and looks at your building and then Classifies your different components for you into 3,5,7,10,15,and fianlly 27.7 year buckets…
I have heard of people starting to get these studies done on SFRs as well to increase depreciation
Re: Depreciation Rates on Multi-Unit Residential - Posted by Penny
Posted by Penny on February 07, 2008 at 13:18:11:
The depreciation rate for commercial residential property, usually considered to be > 4 units, is 39 years not 27.5.
Depreciation rates for personal items and other components usually mirror the useful life.
Check with your CPA for guidance.
Re: Cost Segregation Study! - Posted by TS
Posted by TS on March 10, 2008 at 11:34:03:
I represent a national cost segregation company. If you would like more information, please feel free to email me.
Re: Depreciation Rates on Multi-Unit Residential - Posted by John Davidson
Posted by John Davidson on February 11, 2008 at 22:45:25:
This is directly from the United States Tax Code: Residential rental property. This class includes any real property that is a rental building or structure (including a mobile home) for which 80% or more of the gross rental income for the tax year is from dwelling units. It does not include a unit in a hotel, motel, inn, or other establishment where more than half of the units are used on a transient basis. If you live in any part of the building or structure, the gross rental income includes the fair rental value of the part you live in. The recovery period for residential rental property is 27.5 years.
Landscaping: 15 Years
Personal Improvements: 5 Years
Maybe you should find a new CPA!!!
Re: Depreciation Rates on Multi-Unit Residential - Posted by Penny
Posted by Penny on February 12, 2008 at 13:17:25:
The key words here are “residential rental property”. If it is 6 units instead of 4, I stand corrected.
The number of rental units helps differentiate residential rental property from commercial property. And that is where the 27.5 versus 39 years on the structure comes from. In IRS Form 4592 instructions, Table E shows the recovery schedule for the 39 year assets.
See IRS Publication 946 - How to Depreciate Property. Chapter 4 will give you the breakdown you’re looking for improvements & misc. property. There are 3, 5, 7, 10, 15, etc. year depreciation schedules and it gives examples of the type of property that typically qualifies for the given item.
Table B-1 also has a pretty lengthy list.
If you looked up this publication, then you answered your original question, if not, here’s the link below. Indirectly, form 4592 also provides limited info.
Re: Depreciation Rates on Multi-Unit Residential - Posted by John Davidson
Posted by John Davidson on February 12, 2008 at 19:19:05:
A 150-Unit Apartment Complex is still a Residential Building and thus is subject to a 27.5 year depreciation schedule.
Any Residential Property beyond 4-units requires a commercial loan to acquire it which is why you are confused.