Suggestions

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Rental property depreciation based on actual year placed in service

If I’ve owned a rental property for many years already when I start my PL plan, enable me to specify the past year that it was placed in service and take this into account when computing depreciation and cost basis upon sale.

18 votes

Tagged as Suggestion

Suggested 22 February 2023 by user Chris Miller

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  • 22 February 2023 Chris Miller suggested this task

  • 22 February 2023 Kyle Nolan approved this task

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    This is important because the depreciation is over 27.5 years so we need to be able to specify when it starts (or ends) to get accurate projections.

    21 January 2024
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    As Shawn suggested I’m using current value for depreciation in actual value and will need to manually update until I get to year 27. The feature will remove the need for periodic manual intervention.

    28 February 2024
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    I like this - means I wouldn’t need the tax-exempt income item I’m using now for depreciation.

    25 April 2024
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    This is critical to model rental properties correctly.

    10 July 2024
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    Important! That is one of the dominating parameters in a tax strategy. In the German tax system for one, depreciation is legally deemed a linear 2% = years, but there are special depreciation regimes (3%=33 years linear for new buildings, progressive depreciation…). I you prove a shorter rest usage time of the bulding, you can use that, say 25 years = 4%. The depreciation base congruently not the purchase price, but only the building portion. One property can have multiple “depreciation chains”, differing in starting date, depreciation base and depreciation rate. E.g., major investments can have trigger a new “depreciation chain”. So…

    22 September
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    … my practical suggestion would be to either make a menu for depreciation under the property tab OR make inbuilt depreciation desectable and model depreciation as a “Tax Reduction” under “Income”. Being a newbie here, I might not have understood the existing possibilietes, though

    22 September
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    To be even more accurate tabs for capital improvements (that add value to the $$ that are the basis for the depreciation and also have a depreciation life of their own)

    13 October