When can I start deducting the depreciation on the cost of an improvement for rental property?

[raul_m]

All the condominiums in my brother's subdivision received an assessment to hurricane proof all the buildings.  This assessment was paid upfront in Oct 2019, however, the improvement is not scheduled to be completed until May 2020.  Can he start depreciating the cost of the improvement starting in Oct 2019 or does he have to wait until the improvement has been completed in 2020?  Any help would be greatly appreciated.  Thank you.

[ColeenD3]

An asset is deductible when placed in service. However, is he actually paying for the asset or is he paying an assessment. Generally, a condo board charges an assessment, which is an expense.

[raul_m]

It was actually an assessment to pay for hurricane proofing the condominiums. The cost is $58,400 for each unit so I’m thinking it’s an improvement. Thank you for your assistance. I really appreciate it.

[DianeC958 · Accepted solution]

Yes, you are correct that this counts as an improvement. You can start depreciating the improvement once the improvement has been completed.

Assets are depreciated once they have been placed into service. 

Tax Deductions for Rental Property Depreciation