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When I sell a rental property, can I accelerate refinancing fees and improvement depreciation, like a new roof? Do those go under depreciation?
Purchased a property in 2013, replaced the roof in 2014, refinanced in 2014, sold it in 2017. I have two major items of depreciation, the refinancing fees and the remainder of the roof, that I have not claimed. Can I accelerate those depreciations since it was sold? Do I just put the remainder in the depreciation section? Turbotax only seems to be claiming 1 years worth of depreciation of these fees, despite me telling it the property has been sold.
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Investors & landlords
No. Three factors determine how much depreciation you can claim each year:
- Your basis in the property
- The recovery period for the property
- The depreciation method used
In your case, the roof would depreciate at the same recovery period as the roof before it was replaced. But for other items such as carpets being installed could depreciate at a recovery period of 5 years or 9 years depending on the depreciation system used. For more information please IRS Publication 527
The refinancing fees will be subject to an amortization of 30 years. Please see our FAQ (below) on refinancing rental property https://ttlc.intuit.com/replies/3301761
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It seems to intimate that I can recapture the rest of this roof improvement upon sale if the depreciation is not completed. Is this not the case? Is there no mechanism for recapturing the refinance fees?
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