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Level 3
posted Apr 16, 2023 7:40:33 PM

How do I adjust length of time for depreciation for rental property placed back in service? Or does period reset to 27.5?

Bought a home as a residence in 2018, rented it out 2019-2021, moved back in late 2021 - late 2022, and converted back to rental in late 2022 (our life has been crazy lol). I have to create a new row in the asset depreciation. When doing so,  I understood my new cost basis will be prior cost basis - prior depreciation. However, it does not ask me for the period of the new depreciation line item. So effectively I am not depreciating for the cost basis - ~ 3 years of depreciation but the time period is 27.5 years instead of 24.5.

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1 Replies
Expert Alumni
Apr 17, 2023 7:16:03 AM

Yes, when you bring an asset back into service after personal use, the depreciation period is reset. In other words, the IRS believes it now has the full, original useful life.