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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3170
Experience:  IRS licensed Enrolled Agent and tax instructor
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I purchased an apartment in NYC about 10 years ago ,000. I

Customer Question

I purchased an apartment in NYC about 10 years ago for 760,000. I decided in 2015 to rent it out so i put 145,000 of improvements into it. I can depreciate the building portion of the 760,000 correct? The land is assessed at 9,762 of 70,376 total assessment. Is it correct to depreciate the building over 27.5 years at 9,762/70,376 = land portion (can't depreciate). Reminder would be the building at 653,600 (760,000 * 86%) How do I depreciate the improvements? Do they need to be broken down and depreciated separately?
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

It is all about timing. All improvements you did before you put the place on the market has to be added to the basis of the property (purchase price + improvements = adjusted basis)

For the basis for depreciation you will need to take lower of fair market value on the day of conversion and your adjusted basis. Than you reduce the amount by the value of the land. You will have to use mid-month convention for the house depreciation, meaning if you start renting it in jun, you will take 7/12 of your yearly depreciation in the firs year.

Customer: replied 1 year ago.
Customer: replied 1 year ago.
for some reason I cant give you a rating. I can't select any stars.
Expert:  emc011075 replied 1 year ago.

I am sorry, I have to check the box.

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