In 2006, I rented a small house I own for $500.00 per month rent. From the annual rent of $6000.00, I deducted utilities,
and mortgage interest I paid on the house. I then came to depreciation and called the IRS because the
innstructions were gruesome. I was told to start with the cost of the house, $16,364.45, add in repairs cost of $1,258.72 for a total
of $17,623.17. Divide the total by 27.5 years for a total deduction
of $640.84 annual depreciation, which would always be the same.
But my repairs for 2007 are only $538.50. If I remove the '06 repairs and insert the '07 repairs, I will change the supposed fixed
$640.84 yearly depreciation. Likewise, if I leave the '06 repairs and add the '07 repairs to it, I will also change the fixed
$640.84 yearly depreciation. In reading the recommended publications 523, 527 and 649, I cannot find where this is addressed.
In reading recommended publications 532, 527 and 649, I cannot find this addressed. Presumably, in my advancing years, I am
unable to comprehend instructions as before. Please advise, what is the proper way to figure depreciation with the ever-changing
annual costs of repairs? Thank you.