I have owned a 2-unit rental property for 15 years. The first 10 years I lived in the building and was depreciating half of the purchase price over 27.5 years (because half was investment property). After 10 years I moved out and began renting the whole building. I continued depreciating that same amount though for the next 5 years, so may have been under depreciating it. I have a couple of questions:
- At 10 years, when I moved out, should I have taken the book value (purchase price minus depreciated amount) and depreciated this over the remaining depreciation period (27.5 years from the purchase date)?
- Now that I have continued to depreciate the lower amount that was calculated in the beginning, can I calculate a new book value and now depreciate this value over the remaining depreciation period (27.5 years from the purchase date)?
