I’m not an accountant, but here’s the “rough cut” rules. Your basis is the lower of cost or market ($155K), you’ll need to allocate part of that to land, and the rest to the building. You can depreciate 1/2 of the part attributable to the building, assuming each side is the same size.
IIRC houses are still 27 1/2 year straight line depreciation. I think the roof may be less but I’m not sure. If it’s less than 27.5 years that will need to be on a separate depreciation schedule.
Depreciation is NOT a tax credit, it’s a REDUCTION IN INCOME, against the property on IRS form (??) 1142 (??).
Have your CPA set it up at least the first year, first property. In fact if you haven’t been using a cpa to do your taxes up until now I’d recommend starting now if you plan on being in the REI business.
I own a duplex which I live in and rent one unit. Can you tell me how to calculate depreciation on the building for tax credit purposes against rental income(purchase price in April 2003 about $155,000) and can I also get a credit for depreciation on a new roof put in at that time ($6000). thank you. (current duplex value about $200,000.)