Depreciation basis

[James Maher]

I bought a house in 2011 and lived in it prior to moving out at the end of 2014. February of 2015 I began renting the house. I am trying to determine my cost basis for depreciation. I know that it will be the lesser of the FMV or the adjusted basis. I guess what I'm trying to find out is the adjusted basis as I did improvements to the property while living there. For example, I added a $3000 privacy fence that I would like to be able to depreciation.

I plan on having a cost segregation study performed so that I can depreciate the personal items over 5 years instead of 27.5 years.

In my case, I think the adjusted basis will just be the purchase price minus the personal items.  However, the purchase price (of the structure only) plus personal items will now add up to be more than the purchase price of the home.

[Brandon Hall]

Originally posted by @James Maher:

@Brandon Hall The tax code has a section that shows how to change the way your depreciation is calculated.  There are two separate sections, one that includes instructions on changing from a correct method to another correct method.  The other shows how to change from an incorrect method to a correct method.  You can probably guess where cost segregation falls.

I'm acutely aware of the varying regs surrounding depreciation but I'm still confused. Are you saying cost segregation is required for depreciating all buildings or a cost segregation study is required for depreciating components of property on different schedules (not just lumped into 27.5 years)?