Question

what is the bonus depreciation for a residential real estate improvement

Forum|Forum|6 years ago
January 30, 2020
1 reply
0 views

No text available

It depends. Assuming the residential real estate improvement is a rental (if it was personal use there would be no depreciation), the applicable recovery period determines whether or not the "improvement" to the property is eligible for bonus depreciation.

Those improvements that have a 15 or 20 year recovery periods are eligible for bonus depreciation. Anything longer than that is not eligible for bonus depreciation.

Also, improvements do not qualify if they are attributable to:

the enlargement of the building,
any elevator or escalator or
the internal structural framework of the building.

P

pclipsAuthor

We have had a rental property for 15 years. In 2019 we had to replace two(downstairs and upstairs) heating systems. This property has always been a rental property since we purchased it in 2004. Can we expense the heating system which cost us $15000 or do we have to depreciate it?

S

StratigosA08

You would need to depreciate the heating system. If it is eligible for a special depreciation allowance then you may be able to take the entire amount in depreciation in the first year.