Property bought during 2nd half of year and depreciation

[Joel Reynolds]

I am looking at some  properties to purchase and was wondering if the amount of depreciation claimed changes if I bought the property in say the 3rd quarter of the year versus the 1st.  I've seen a few different options for calculating depreciation and am wondering how to get the most bang for my buck.

Any guidance is greatly appreciated, thanks.

[Michael Plaks]

Quote from @Joel Reynolds:

I am looking at some  properties to purchase and was wondering if the amount of depreciation claimed changes if I bought the property in say the 3rd quarter of the year versus the 1st.  I've seen a few different options for calculating depreciation and am wondering how to get the most bang for my buck.

Depreciation does somewhat depend on the timing, however I would be strongly against making purchasing decisions based on taxes. You buy when you have a deal. It may not be here tomorrow, and taxes won't matter then.

That said, if you're trying to estimate your future tax benefits, keep in mind these things:
- depreciation is only applicable to rentals
- depreciation starts when you place the property "in service," not when you buy it
- depreciation increases your deductions and consequently your tax losses, but you may or may not be able to benefit from these losses, depending on your overall tax situation
- if you do have room for additional depreciation, you may be able to amplify it with cost segregation (a separate topic)