Accelerated Depreciation - how to use it?

[Donna Regev]

Accelerated Depreciation - can you use it on your taxes when you are an investor in a group purchase of a multifamily Apartment Complex? or an investment in a Senior Assisted Living Facility?
 What type of investments allow you to use accelerated depreciation?

[Oren K.]

Donna,

My understanding is that 'accelerated depreciation' requires segregated capital accounting. Also, investment may be to broad a term; various items, if accounted for separately, can be depreciated at different rates (e.g. Carpeting, Appliances). Sometimes it is in recognition that the item simply wares out more quickly and sometimes it is just the government trying to encourage spending.

If everything is just thrown into the capital expense account, the depreciation is going to be based on the longest period. If things are segregated, each category has it's own depreciation period / schedule. So unless the bookkeeper / accountant does the segregation, you are stuck with the longest period.

Also, as an investor in a group, you do not get to claim depreciation directly / separately. The entity the holds the investment, claims the depreciation on its tax return.

This really should be a discussion with your accountant but I hope this helps.

Oren