Posted by Dave T on March 29, 2008 at 13:59:00:
In Reply to: Great Information posted by Kenneth Hocking on March 26, 2008 at 20:10:30:
Commercial property has more asset classes than residential rental property. Residential rental property only has three depreciable asset classes: 5, 15, and 27.5 year property.
It is real easy to figure out what components of a residential property belong to each asset class. If you are able to take the roof off your rental property, pick up the building and turn it upside down, nearly everything that falls out (washer, dryer, furniture, carpeting, window treatments, for example) is personal property and goes into the five year class.
Nearly everything outside the building that is an improvement to the grounds is landscaping (such as sidewalks, fences, plants, trees, shrubs, mulch, in-ground irrigation systems) and is 15 year property.
Everything else that is permanently attached to the building is an integral component of the building structure (walls, doors, windows, plumbing, most fixtures, wiring, HVAC, water heater, roof, etc.) is 27.5 year property.
No need to spend $10K or more to figure this out for a residential rental property.
Section 179 deductions are available for equipment purchased for your business, but not for residential rental property (even in the GO Zone as I understand the tax code).