Hi Kris,
Thank you.
Two different properties:
1) Property 1: The Roof replacement is a different property than the one I sold. So the $14,320 I paid for the rental property can only be added as an asset and depreciated 27.5 years? I can not use the 179? In what case can I use the 179?
2) Property 2: The property that I sold is as follow:
Purchase price in May 2007 was $190,000
Total Depreciation was $80,372
Net Sale price September 2022 was $324,370
So am I understanding this correctly:
$324,270
- 109,628 adjusted cost after depreciation
- 80,372 depreciation recapture tax (is this taxable at 25%?) $20,093
- 134,370 capital gains tax (15% long term) $20,156
Since I have to pay all these taxes on property 2, that's why I was wondering if I could possibly depreciate the full amount for the roof on property 1. It seemed I qualify?
Here are the rules and limitations for 2022:
- The asset must be tangible personal property, including software (not real estate).
- It must be used in a trade or business (property used in a rental activity is generally not eligible).
- You must take the deduction in the year you start using the asset.
- The decision to use Section 179 must be made in the year the asset is put to use for business.
- The deduction cannot be more than your earned income (net business income and wages) for the year.
Much thanks,
Sally
