8 Replies

@Josh Thomas Take the purchase price and separate the land value from the building value. County tax records may have this information available in property records. The land portion is not depreciable. Take the value of the building and divide by 27.5 because the IRS has allowed taxpayers to depreciate residential property over 27.5 years. That number will be the allowable depreciation per year.

This response neither constitutes legal advice nor establishes an attorney-client relationship. Inquirers must seek the advice of their own legal counsel prior to undertaking any course of action related to this inquiry.

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Are there any special considerations if you are house hacking?  We own duplex and rent out the other half.  It seems like we get a different answer on what credits we're eligible for and what deductions we can take every CPA we talk to.  If it helps we are in California.  

A recent appraisal of my rental property valued the land at $30,000 (or about 15%). However, when I look it up on the county Assessor site it gives a value of $40,000 (or 25%). Which should I use when calculating for depreciation?

@Naseer Khan just finished reading the article you referenced in your comment. Great article, it provided me with a good basic level of understanding when it comes to rental property taxes. I'm sure with the new administration we will see some of these rules and percentages change.