Rental Property - Deduction of Insurance Premiums

[Florida712]

What is the correct way of handling the deduction of insurance premiums for rental properties if the premiums change year over year?
e.g. I pay wind insurance every here on August 1 for the coming 12 months.
If I follow the deduct when you pay approach I would deduct the full premium with that year's tax return.

In the past I also followed the "realization" approach, i.e. in 2019 I would deduct premiums Jan-Jul with the old premium (paid in 2017) and Aug to Dec with the new premium paid in 2018.

Which one is correct?

Does this approach change in a case when I paid advance premium for a 5 year coverage?

[tagteam]

You can generally deduct insurance premiums for your rental real estate provided the premium is not for more than one year in advance.

See https://www.irs.gov/publications/p527#en_US_2018_publink1000218986

If you pay an advance premium for five years of coverage, you are essentially creating an asset that has a useful life of more than one year.

See https://www.irs.gov/publications/p535#en_US_2018_publink1000208862

[Carl]

One important thing to note here. If you paid the insurance for 5 years in advance, then it is an "amortized" asset that is deducted over 5 years. It is *NOT* a capitalized asset that gets depreciated. This matters.