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Updated over 9 years ago on . Most recent reply presented by

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499
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210
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Andreas W.
  • Durham, NC
210
Votes |
499
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Tax question about cost basis caculation for rental property

Andreas W.
  • Durham, NC
Posted

For the first time I started the acquisition of a SFH in one year and closed in the following year. In 2015 I paid inspection fee, loan origination fee, and appraisal for a property I closed on in 2016. I understand that these fees increase the cost basis of the acquired rental property and that they get depreciated over 27.5 years. Do I start depreciation of the fees at the closing date in 2016 or is there a different mechanism to apply since the expenses actually occurred in 2015?

Most Popular Reply

Account Closed
  • Accountant
  • Philadelphia, PA
210
Votes |
303
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Account Closed
  • Accountant
  • Philadelphia, PA
Replied

Depreciation start date depends when the property is ready and available for whatever business purpose. Check out example 2 in the link.

https://www.irs.gov/publications/p527/ch02.html#en...

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