How to depreciate new windows?

Forum|Forum|3 years ago
January 28, 2023
1 reply
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I bought a rental condo in 2022 and did an extensive remodel, so I have the depreciation figured on all that. This year will I replace all the windows at a cost of $9,295. I'm confused after reading IRS P527. I think they would be depreciated over 27.5 years starting in June, which is the planned install date. An excerpt from P527 (Page 9) says:

"Additions and improvements, such as a new roof . . . . . . . . .

The same recovery period as that of the property to which the addition or improvement is
made, determined as if the property were placed in service at the same time as the addition
or improvement."

I don't understand how you can retroactively start depreciation? or is it saying start new depreciation schedule for the property and new windows. I'm confused.

Chris

Carl11_2

Employee

The new windows become "a physical part of" the structure. No question on that. They are classified as residential rental real estate and depreciated over 27.5 years. You will enter the windows as another asset in the Assets/Depreciation date, and depreciation will start on the first day the windows were placed "in service", or on the date the property was place "in service".... whichever date is later.

Depreciation is never retroactive. Depreciation starts on the first day an asset is "available" for the production of income.

OldGuyStillTryAuthor

Thanks for the quick response, Carl.

That's exactly the way I set it up in my forecast spreadsheet - separate new asset, 27.5y, starting in MM June.

But what is the quote from P527 trying to say? Or is that just IRS gibberish that says what you said?

Chris

Carl11_2

Employee

But what is the quote from P527 trying to say? Or is that just IRS gibberish that says what you said?

I't saying the same thing I said. Note the word "retroactive" appears nowhere in the part you quoted. You're just reading things between the lines that just aren't there. The more definitive publication on depreciation is actually IRS Publication 946, of which rental real estate is only a small part of that publication.