topic Depreciation of a central AC/furnace in Investors & landlords

Depreciation of a central AC/furnace

TL3 — Mon, 03 Jun 2019 17:25:03 GMT

I am replacing AC/furnace for my rental house (built in 1997). Should I choose 7-year depreciation or 27.5? A CPA told to use 7 year. I'd like to confirm this with other CPA's in the community! Actually 27.5 years doesn't make sense since AC/furnace can't last that long. Thanks!

If the AC unit were a removable window unit, then you cou...

BMcCalpin — Mon, 03 Jun 2019 17:25:04 GMT

If the AC unit were a removable window unit, then you could use 5 years, since the window unit could be considered an appliance.

But if the "AC/furnace" is part of the structure and is what is called "central heat and air", then the unit is part of the structure itself, and must be depreciated over 27.5 years.

Please see Table 2-1 in IRS Publication 527.

Re: Depreciation of a central AC/furnace

gjoycejohnson — Fri, 01 Apr 2022 02:27:58 GMT

Replaced AC Unit in Rental Property in amount of $5,500 in 2021. How do I calculate depreciation and for how long?

Also replaced stove in Rental Property for $950. Does this have to be depreciated or can total amount be deducted for 2021?

Re: Depreciation of a central AC/furnace

Carl — Fri, 01 Apr 2022 13:35:42 GMT

Replaced AC Unit in Rental Property in amount of $5,500 in 2021. How do I calculate depreciation and for how long?

See response in this thread from @BMcCalpin

Also replaced stove in Rental Property for $950. Does this have to be depreciated or can total amount be deducted for 2021?

The stove can be either expensed and deducted in full under Safe Harbor DiMinimis (recommended) or it gets classified as an appliance and depreciated over 5 years.