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Old 03-21-2016, 11:20 PM
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Recovery Period for Basis of Property Changed to Rental Use

I converted my house to a rental on 5-1-2015 and am trying to figure out the recovery period for the house plus improvements and whether or not they need to be calculated separately.

Q1) Do I need to apply different recovery periods to improvements such as new carpet, sump pump, garage door opener? As these improvements by themselves seem to be listed as having a different recovery period than the residential rental property itself. Or are these improvements all considered as a part of the residential rental property for the basis and depreciated at the same rate (When the house is first put into service as a rental)?



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Old 03-22-2016, 05:36 PM
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Q1) Do I need to apply different recovery periods to improvements such as new carpet, sump pump, garage door opener?====> you?ll have to depreciate the cost of the carpet over the property?s useful life. If the carpet is tacked down, it is classified as personal property and is depreciated over 5 years. But if the carpet is glued down, it is considered to be part of the building structure and must be depreciated over a whopping 27.5 years. Today, most carpets are tacked down, and qualify as personal property with a 5 year deprecation period, You can deduct the cost of replacing a carpet in a single year if
Any item you purchase that costs $500 or less, Minor repairs and maintenance jobs like changing door locks, repairing a leak or fixing a broken window do not qualify as capital improvements and depreciate them over their useful life. A sump pump has a several year lifespan and improves the value of the house. So you can depreciate the cost over several years as a capital improvement. I guess you amy even apply sec 179 expensing to some improvement i.e., flooring or some advertising signs.




As these improvements by themselves seem to be listed as having a different recovery period than the residential rental property itself. Or are these improvements all considered as a part of the residential rental property for the basis and depreciated at the same rate (When the house is first put into service as a rental)?==>as said above; it depends.



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