"Placed in Service" definition for cost seg / acc depreciation
I am in the process of building a sfr, it will be complete and refinanced in mid December. It will be held as a long term rental. Since I qualify as a Real Estate Professional I intend to have a cost seg study done and utilize accelerated depreciation to offset my earned income in 2022.
My question is what criteria will I need to meet to assure the property is "placed in service" in 2022.
Do I need a signed lease in 2022?
Do I only need to list the property as available in 2022?
I am concerned about getting a quality tenant in there around the holidays, while also only having approximately 2-3 week window before Jan 1.
#2 Tax, SDIRAs & Cost Segregation Contributor
- CPA, CFP®, PFS
- Florida
- 2,846
- Votes |
- 3,273
- Posts
#2 Tax, SDIRAs & Cost Segregation Contributor
- CPA, CFP®, PFS
- Florida
The property has to be in service. Making it ready and available for rent meets the definition of the PIS. Having a tenant is even better.
@Jonathan Mooney Typically your property can be deemed "placed in service" when it's ready for a specific use. Whether or not its rented out or "used" during the tax year does not matter. I just DM'd you, I'd be happy to explain it in more detail if you'd like.
Cheers
