Depreciation for Rental Properties
Are you getting the right depreciation on your rental property? If you own rental property then you'll want to make sure you're getting all the deductions you deserve.
Before you figure your depreciation you need to meet two criteria; you need to own the property, the property must be for business and income generating activities, and the property must have a useful lifespan of more than one year. If you meet all of these criteria you qualify for tax benefits on the deprecation of that property. For the record, depreciation is an income tax deduction that lets you recover the costs of wear and tear, and deterioration.
Your depreciation begins the moment you place property you own into business use. This applies to rental units as well as to home office and equipment. Remember that if you are planning on selling the property within the same year as you purchased it, you do not qualify for any depreciation benefits.
To figure your depreciation use the IRS's Modified Accelerated Cost Recovery System, which can be found in publication 946 while Form 4562 is what you'll need to file with your taxes.
If you have trouble figuring out your depreciation, contact a professional. It's a valuable enough tax deduction that it's well worth your time and effort to get it right.
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