How does rental property depreciation calculate?

[sunshineInTheRain]

I noticed the depreciation amount is less than (Cost base - cost of land)/27.5. Why?

[tagteam · Accepted solution]

MM = the property is placed in service at the midpoint of the month; 1/2 month of depreciation is allowed for the month of January.

See https://www.irs.gov/publications/p946#en_US_2018_publink1000107539

[sunshineInTheRain]

Thanks! I am curious. TurboTax does not give me a choice to select mid-month or first-month conversion, and I did enter this property is converted from primary residence to rental on 1/1/2018. Wondering why it just chose MM conversion for me

[tagteam · Accepted solution]

You have to use straight line and mid-month for residential rental property.

See https://www.irs.gov/publications/p527#en_US_2018_publink1000219089