Question: So my example of House, Renovation, and New Roof would all be bundled using the same ID? Even if they're different classes (e.g., 27.5 vs. 15 years)?
- See the information below for how to proceed with the change in property and maintaining the same assets for the new property.
Question: Or would you have to create two asset IDs with half the value each? Yes
- You would take each of the old assets, split it in half for each recovery period and enter it as though nothing changed. The same cost basis, the same original date placed in service, etc. This will keep the new assets with the same character, depreciation and cost basis as the original assets which is how it works.
You depreciate property you received in a like kind exchange (Section 1031), as though you never gave up the original property. You use the same adjusted basis as the property given up. If you paid money in addition to the property given up then you would depreciate the additional cost over the same recovery period as a new asset, placed in service in the current year.
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