Posted by Dave T on March 26, 2008 at 18:34:19:
In Reply to: Cost segregation Gets a Boost? posted by Kenneth Hocking on March 26, 2008 at 09:05:52:
A rental property only has three depreciation classes, 5 year, 15 year, and 27.5 year property.
The 5 year depreciation schedule applies to personal property such as furniture, appliances, area carpets.
The 15 year depreciation schedule applies to landscaping and grounds improvements. I am told that driveways and sidewalks fall into this category as well as the traditional landscaping stuff like trees, shrubs, mulch, decorative paving stones, etc.
The 27.5 year property is everything else that is an integral component of the building structure. Plumbing, wiring, HVAC, water heater, doors, windows, etc.
Seems kind of a waste of money to order an expensive cost segregation study to determine which items fall into which asset class, when you only have three that apply to rental property, and the items that are in each class are fairly well defined in the IRS publications you can download for free.
A cost segregation study might make more sense for an expensive commercial property that has a 39 year depreciation schedule. But for a $120K residential rental property, I think the cost of a study is not worth the benefit you would get.
Regarding Section 179, section 179 deductions are not permitted for rental property.
- Great Information Kenneth Hocking 20:10:30 03/26/08 (2)
- Re: Great Information Dave T 13:59:00 03/29/08 (0)
- Re: Great Information Len 22:58:13 03/27/08 (0)