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Returning Member
posted Mar 28, 2024 8:53:07 AM

Asset depreciation

Sold rental property, held for 10 years. During that time, install a new well system, for the old well went dry.  Under what classification asset will I depreciate the well

0 2 440
2 Replies
Expert Alumni
Mar 28, 2024 9:29:30 AM

The IRS Publication 946 How To Depreciate Property includes the Table of Class Lives and Recovery Periods found here on page 97.

 

As a component of residential rental property, I would select Rental Real Estate Property and Land Improvements.

 

Level 15
Mar 28, 2024 10:27:02 AM

the well would have been a land improvement and should have been deprecated starting with the date it was placed intp service. Without filing form 3115 you can't catch up on the depreciation yo didn't take all at once. Having sold the property you must recapture the depreciation that was omitted. I strongly recommend consulting with a tax pro so things can be fixed.