Air Conditioning Depreciation in Rental

[BillMar472]

I started renting a home in 1994. I have expensed 19 years of the 27 years of depreciation required on the building. There are 8 years remaing of depreciation. In 2013 I replaced the  central air conditioining system for $6000. Do I derpeciate the replacement A/C over 27 years as required under MACRs, or can I depreciate it over the remainin life of the buidling to which it is part of, which would be 8 years?

[suzanne · Accepted solution]

Believe it of not, the depreciation period is 27.5 years.  Certainly the A/C won't last that long.  When the A/C gets replaced, you will be able to accelerate the depreciation in the replacement year.  If you sell the rental, what's not deprecated will remain on your basis for the property, and thus reduce potential capital gains.