So I just want to check a few things to make sure I am going in the right direction. I have an airbnb that classifies as a Schedule C according to the 2022 IRS instructions. So to do depreciation for a Schedule C Property and Improvements I go to "Wages & Income" > "Self-employment income and expenses" and I do depreciation under "Assets" is that correct?
For the property it will be classified as "J1 - Nonresidential" and will depreciate over the next "39 years" correct?
For property improvements it will be classified as "J5- Qualified improvements" it can depreciate over the next "15 years" or I can do a Section 179 correct?
So assuming that is all correct, I am a bit confused on the depreciation results. For example, if I type $15,000 for "J5- Qualified improvements" and select to spread the deduction over 15 years, it only deducts $500 (increases my refund by $60 [12% of $500] which is only half what it should be, however if I take do a 179 it deducts the full $15,000 (increases my refund by $1,800 [12% of 15,000]. Why is that?
Having a similar issue with the "J1 - Nonresidential". For example, if I paid $100,000 it for some reason is depreciating at $1603 or $62,517 over 39 years. I am confused
One last question, if I do a section 179 or a 15 year spread on the improvements for last year, and this year the property turns into a long term rental or a schedule E, will that complicate things for 2023 tax return?
