Question

rental vacant for 4 years

Forum|Forum|5 years ago
March 6, 2021
1 reply
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Our rental was vacant for 4 years while we remodeled. What is the date we first started using it for business. The date we put it up for rent 35 years ago when we first started renting it or after it was available for rent 4 years later after the remodel?

ColeenD3

It is basically a new property but you can't start depreciating it again. Since you began renting in the mid1980s, you either used ACRS or MACRS depreciation systems. As of 1987, MACRS real property had a useful life of 27.5 years, meaning the property would have been fully depreciated by 2014/2015. Your basis for depreciation is zero.

You can, however, depreciate the remodel costs over 27.5 years.