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BullredsRus
LSU Fan
Baton Rouge
Member since Aug 2007
420 posts

Depreciation of a rental house

I bought a rental house in November of last year. I'm doing my taxes right now, and Turbotax is giving me a $600 depreciation on it (purchase price was $195). Does this sound right? Are they giving me depreciation of a pro-rated amount since I purchased so late in the year?


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
34140 posts

re: Depreciation of a rental house
200k on a rental house? damn brah...what kind of rent are you getting?


Sorry I am no help on your question.


Tigah in the ATL
LSU Fan
Atlanta
Member since Feb 2005
26407 posts

re: Depreciation of a rental house
Well, it does depend on when you start it. If you bought it in Dec, that might be right.


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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
17580 posts

re: Depreciation of a rental house
Residential rental properties get depreciated straight line over a 27-1/2 year period, and they are subject to the mid-month convention, which means they are treated as placed in service on the 15th daqy of the month. So you would get 1-1/2 months worth of depreciation for 2012. That means you get 1.5/330 = 0.454545% of the basis in the building for depreciation (some of the purchase price should be allocated to the land which is not depreciable).

Let's assume you allocate $40,000 of purchase price to land. You have $155,000 of depreciable basis in the building. $155,000 x 0.454545 = $705 of depreciation.


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Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
8548 posts

re: Depreciation of a rental house
I owned a rental house for twenty years and one of the hardest things about it was keeping up with all the depreciation accounts. All major repairs and improvements had their own depreciation schedule and there was no TurboTax to help back then. It's why accountants stay in business.


Cholo
LSU Fan
National City, CA
Member since Oct 2012
1076 posts

re: Depreciation of a rental house
Trying to figure this out right now. Started renting out my house in Central Texas last February.


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BullredsRus
LSU Fan
Baton Rouge
Member since Aug 2007
420 posts

re: Depreciation of a rental house
It's actually a duplex. I get 1200 per unit.

Thanks Poodlebrain, that pretty much answers my question. I've always used turbotax with no issues, but I'm thinking of calling a CPA this year bc there are things that just don't look right and there is no one to answer my questions with turbotax


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