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Investment Property - Someone explain DEPRECIATION DEDUCTION
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Date: January 28th, 2012 1:46 PM Author: Obsidian Market Lets say you buy a property for $300,000. The Land Value is $30,000.
You rent it out.
You can depreciate for 27.5 years.
Does that mean your depreciation deduction per year is roughly $270,000/27.5 or $10,000.
This seems like a very big deduction when you consider that mortgage interest is also deductible. |
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Date: January 28th, 2012 1:58 PM Author: Floppy internal respiration fanboi 27.5 for residential
39 for commercial |
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Date: January 28th, 2012 2:05 PM Author: flatulent aphrodisiac library that's not a very big deduction. remember, it's a deduction not a credit. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852867) |
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Date: January 28th, 2012 2:09 PM Author: Obsidian Market true, but that's a 10K deduction on top of mortgage interest which is another 10K or so. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852899) |
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Date: January 28th, 2012 2:48 PM Author: flatulent aphrodisiac library Yeah but in order to make a profit you have to pay mortgage on your interest and for the building.
Remember, this isn't for your personal home. This is for a business. |
Date: January 28th, 2012 1:48 PM Author: Marvelous lime wrinkle You can't depreciate land faggot (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852735) |
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Date: January 28th, 2012 1:51 PM Author: curious deep theatre wagecucks Reading comp fail (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852763) |
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Date: January 28th, 2012 1:54 PM Author: Marvelous lime wrinkle to be fair, yes. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852787) |
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Date: January 28th, 2012 1:52 PM Author: ebony ungodly haunted graveyard knife midnight cowboy this is your chance to shine (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852771) |
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Date: January 28th, 2012 2:47 PM Author: Swashbuckling Sex Offender Sanctuary this is the sort of question i pass off to the the big boys making at LEAST $55k/year (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19853089) |
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Date: January 28th, 2012 1:52 PM Author: Massive claret hunting ground boltzmann *shitlaw steve SPRINTING ITT* (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852775) |
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Date: January 28th, 2012 1:52 PM Author: titillating salmon range are we talking tax here? Is the US really straightline and not declining balance? (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852777) |
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Date: January 28th, 2012 1:53 PM Author: ebony ungodly haunted graveyard knife the us is double declining balance (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852784) |
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Date: January 28th, 2012 1:57 PM Author: titillating salmon range yea, so what is the OP talking about? (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852813) |
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Date: January 28th, 2012 2:04 PM Author: flatulent aphrodisiac library not for residential property (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852859) |
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Date: January 28th, 2012 1:57 PM Author: Floppy internal respiration fanboi It's 27.5 years for residential buildings and 39 years for commercial buildings. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852821) |
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Date: January 28th, 2012 2:08 PM Author: Obsidian Market right so if you have a residential property that you rent out, you would divide the $270K by 27.5 to get your deduction. correct? or am I missing something. It just seems high. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19852896) |
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Date: January 28th, 2012 2:33 PM Author: territorial faggotry you have to pay it all back when you sell (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19853011) |
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Date: January 28th, 2012 2:34 PM Author: Silver judgmental pervert cuckold under the straight-line depreciation method yes (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19853019) |
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Date: January 28th, 2012 2:36 PM Author: exhilarant generalized bond corner except for the first year, in which you need to employ the mid-month convention, i believe. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19853035) |
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Date: January 28th, 2012 2:37 PM Author: Silver judgmental pervert cuckold Not sure. Would need to go back to the books on this (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19853039) |
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Date: January 28th, 2012 2:50 PM Author: exhilarant generalized bond corner IRC § 168(d). yeah, you use a mid-month convention for the first year you put it into use. those depreciation rates are found in the depreciation tables of the IRC (p. xvi). then, you do straight-line method for the remaining 26.5 years. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19853100) |
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Date: January 28th, 2012 2:37 PM Author: Boyish Crystalline Public Bath Edit I'm wrong (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19853040) |
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Date: January 28th, 2012 2:44 PM Author: Boyish Crystalline Public Bath Double edit: I was right you can't deduct interest on a rental (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19853075) |
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Date: January 28th, 2012 6:49 PM Author: thirsty nubile institution yes you can. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19854460) |
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Date: January 28th, 2012 7:11 PM Author: Passionate Tanning Salon Multi-billionaire Sure you can. You can deduct all costs including depreciation, but unless you are a real estate professional, you can't carry over losses to other types of income. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19854592) |
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Date: January 28th, 2012 7:21 PM Author: amber excitant property ITT -- why lawyers and accountants will always have jobs -- most people are really fucking stupid.
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Date: January 28th, 2012 7:23 PM Author: ebony ungodly haunted graveyard knife most people would rather not subject their minds to the mind numbing vagaries of law and accounting (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19854673) |
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Date: January 28th, 2012 8:45 PM Author: Awkward garnet hospital skinny woman it seems like a lot but remember you are taking down your basis the entire time, so when you sell you pay tax on the sales proceeds less the remaining basis. basically the deduction allows you to defer taxes rather than avoid them, which is still nice. (http://www.autoadmit.com/thread.php?thread_id=1859971&forum_id=2#19855097) |