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Anne, Master Tax Preparer
Category: Tax
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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# Hello, I bought 23 units apartment building in Jan 2013. This

Hello, I bought 23 units apartment building in Jan 2013.
This building was built in 1961year.
My question is "Depreciation".
I am wondering if this old apartment building could be depreciated for tax deduction?
If yes, how calculate depreciation?

Anne :

Hi

Anne :

Customer:

Hi

Anne :

Yes, you may depreciate the building

Customer:

Customer:

May?

Anne :

In fact , you NEED to depreciate the building

Customer:

Even if more than 50years old building?

Anne :

You depreciate the building from the time YOU purchase it

Anne :

doesn't matter if anyone else depreciated it in the past

Customer:

Can you tell me the calculation for depreciation?

Anne :

Yes, its done by a % set up by the IRS

Anne :

let me find that for you.....will take a minute

Customer:

Thank you so much.

Anne :

finding a good copy that you can read is the hardest part of answering this question

Anne :

Customer:

no problem

Anne :

almost there

Anne :

well, I am there.......just takes a minute for the information to load

Customer:

thank you

Anne :

Sorry its taking so long...., but depreciation is based on the property you're depreciating (the term "property" in this context is any thing depreciable, such as a car)

Anne :

and there are ALOT of depreciation tables

Anne :

However I think it should be done loading here in just a minute

Customer:

I want to make it sure that I can depreciate this 53years apartment building.

Customer:

Somebody told me that over 40years building can not be depreciated.

Anne :

You will not be able to depreciate the building over a 53 year live span

Anne :

the IRS decides how many years you can depreciate something based on the type of property it is

Anne :

for example: car is depreciated over 5 yars

Anne :

the 40 years somebody quoted you is for non rental business property............such as a general store for example

Customer:

You mean even if this building age is 53 years, I can depreciate this building from purchasing date for 40 years.

Anne :

rental property, like yours, is depreciated over 27 1/2 years

Anne :

yes

Anne :

Let me see if I can explain this a little better

Anne :

Anne :

the building may be old.......but its a new purchase for you

Anne :

For example.......let say you purchase a home strictly rental purposes

Anne :

the home may be 25 years old......but YOU didn't put the home "into service" (meaning you couldn't rent it until your purchased it)

Customer:

this is 23units commercial apartment building, not residential property.

Anne :

I know

Anne :

was hoping the example of the home would be easier to understand...........theory is the same

Customer:

residential 271/2 year, and commercial 40years??

Anne :

yes

Customer:

so you mean my case 40years ?

Anne :

no

Anne :

rental is 27 1/2 years

Anne :

if the building was an office bldg for example.......then it would be 40 years'

Customer:

Thank you so much.

Anne :

Anne :

for depreciation

Customer:

It is good thing to know O can depreciate this 53years old building.

Customer:

Great!

Anne :

it is on page 73 of

### 2012 Publication 946 - Internal Revenue Service

Anne :

if you would like me to explain it to you (its not hard once you know what you're looking at), then I'll wait until you get to that page

Customer:

Thank you so much. I will take a look. And

Customer:

Anne :

You're most welcome

Customer:

I do not have time now.

Customer:

Thank you.

Anne :

no problem. If you find you need help or you have a follow up question, you may come back to this thread by bookmarking it.......even after you rate and pay

Customer:

Thank you. I will. Have great day!!

Anne :

You too!