I did 1031 exchange in mid-2024 for the first time. How do I calculate annual depreciation amount for the replacement (new) property?
I understand the replacement property will carryover the adjusted basis from given up property plus any additional excess basis for the new property.
For instance, let's say, the carryover basis is $300,000 and Excess (Additional) basis is $100,000.
Do I add them up and divide by 27.5 years? (i.e. $14,545 annually)
Some sources say use the same depreciation as before with given up property (let's say it was $5,000) for the remaining years (my case was 8 years remaining out of 27.5 years) plus new additional basis for 27.5 years. But that's awfully low amount to deduct...
In addition, I don't need to consider any building vs land ratio for the replacement property?
Thank you in advance for your help!
