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Investors & landlords
The place in service date also makes a difference in the depreciation expense. Residential real estate is depreciated over a 27.5 year life on a straight-line basis and used a mid-month conversion (this means that for the month placed in service, no matter what day during the month, you will only get a half of month's worth of depreciation for this first month).
Please make sure the Accumulated Depreciation from the prior depreciation report is entered correctly. Not all software shows the ending accumulated depreciation. Some software will show the prior year's ending and you would need to add 2021 depreciation expense in order to compute the correct 2021 accumulated depreciation amount.
Please also review the IRS Publication below:
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March 8, 2023
7:40 AM
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