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Old 11-16-2014, 01:10 PM
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US Return: Rental Property Depreciation

Hi,

I purchased a new property in 2009 for US$300K. This was my primary residence till May31/2011. From June01/2011 its been rented out. On June01/2011 the market value of the property was US$350K.

1. Should the depreciation be on 300 or 350?

2. For how many years should the depreciation be spread over?

Thanks
Debbie



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Old 11-16-2014, 02:19 PM
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1. Should the depreciation be on 300 or 350? ==========the lower of its adjusted basis or fmv(excl land value) when it was converted to rental use.so $300k(excl land value) I guess.

2. For how many years should the depreciation be spread over?==for the next 27.5 years after it was placed in rental service; when you dispose of the pty, you must recapture the cumulatice depre as ordinary income taxed at 25% if your tax rate is25% or higher.



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