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Level 1
posted Jan 26, 2022 9:58:17 AM

Accounting method for depreciation of assets

We purchased an investment property in 2021 as a residential rental property in another state which is not our primary residence. This is the first year to include on tax return. Someone told me we are able to take deductions on our tax return for a rental property. What is the preferred accounting method for depreciating property? Is there a list of items that can/cannot be depreciated? What IRS publications will help me? Thank you.

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2 Replies
Level 15
Jan 26, 2022 10:11:24 AM

https://www.irs.gov/pub/irs-pdf/p946.pdf  2020 version. evidently the 2021 version hasn't been published  

 

residential real property

generally, straight-line over 27.5 years using the mid-month convention under GDS

or 30 years also straight-line if you elect ADS.

 

Level 1
Jan 26, 2022 10:15:31 AM

Thank you for sharing the 2020 publication. I surely have some reading to do.  I do not necessarily comprehend the details you shared under the publication link, but I am sure I will once I take the time to read the publication.

 

Cheers!