Can i claim depreciation for a metal building I put up for business use even though it's on residential land? It's on the same lot as my home. IRS Pub946 doesnt clarify.

[sagacious12]

IRS Pub 946 uses language like "commercial building" and non residential real estate"  which makes me wonder if the IRS is concerned about the zoning of the land? or...since my metal building is a commercial type building, is that all that matters?  chapter 1 of Pub946 "Overview of depreciation" under "What Property can be depreciated" it says "Property you own" and lists some examples but doesn't mention commercial or non-residential. It isn't until you get to chapter 4 of Pub946 and look at "recovery periods under GDS" that you start seeing this "non-residential real property" language. Which, I'm also assuming that I'd use GDS to determine depreciation.        Any thoughts to clear this up? 

[RichardG · Accepted solution]

Land does not depreciate for tax purposes, so the terms "real estate" and "real property" can be confusing when discussing depreciation.  All that matters is the structure, and how the structure is used for business.  The zoning of your land has no effect on depreciating the building. 

To correctly enter the new building as a business asset in TurboTax, select "Real Estate" then "Nonresidential Real Estate" on the next screen.  Enter the total cost of the building on the next screen.  Leave the "cost of land" box empty in this case.