topic residential real estate rental in Investors & landlords

residential real estate rental

garycarols — Thu, 06 Feb 2025 17:43:22 GMT

In advance, THANK YOU for helping me with this! Does a residential rental qualify for either the 179 deduction or the special depreciation allowance? I understand the home itself is depreciated straight-line over 27.5 years. We lost our tenant of 10 years in 2024 and were left needing serious upgrades to the inside of the home (new flooring/countertops/fireplace insert/mouse infestation mediation/etc.). I have read and re-read Pub 946 and am still not certain how to proceed with depreciation of these repairs. Again, I appreciate your guidance on this!!

Re: residential real estate rental

garycarols — Thu, 06 Feb 2025 17:48:12 GMT

I just re-read my posted question, and realize that my word "repairs" at the end SHOULD have been "Repairs and Improvements." Thanks again!

Re: residential real estate rental

RobertB4444 — Thu, 06 Feb 2025 17:58:47 GMT

No, you can't take section 179 or bonus depreciation on residential real estate UNLESS it is a business. And since this sounds like it is your only rental property you probably don't qualify to use your rental property as a business.

Section 179 requires that the rental property be a business, bonus depreciation requires that the item have a useful life of less than 20 years.

Here is a discussion about the rules to qualify your rental property as a business.

@garycarols

Re: residential real estate rental

garycarols — Thu, 06 Feb 2025 20:55:24 GMT

RobertB4444: I am NOT a business, so I can NOT take the section 179 or the special depreciation allowance. You don't know what a relief it is to understand that now! THANK YOU SO MUCH!