@Anonymous_ wrote:
A donor does not "gift" accumulated depreciation, as such. Rather, the donee's basis for depreciation is the donor's adjusted basis at the time of the gift, which in @AmeliesUncle's example is $35,000.
To put it differently, the donee does not take any part of the donor's previously claimed depreciation deductions and the placed-in service date is the date of the gift.
Bas on my memory (which isn't great), my opinion is the the depreciation is gifted as well, but I think the law is mostly silent about it. In my opinion, when calculating a gain or loss from the sale, the recipient in the example above should be use $50,000 ($10,000 for land and $40,000 for building) with $15,000 of prior depreciation (which will be subject to §1250 gain rates).
Regulation §1.167(a)-11(e) says that the "placed in service" date is based on the taxpayer, not the property. For depreciation you use the lower of Adjusted Basis or FMV, so that would be $35,000 starting when the taxpayer placed it in service.
