let's say you have a house you bought on 01/01/2015.
you rented 1 year from 2020 to 2021, and again from 2023 to 2024.
how would you calculate the bases of depreciation for each of the two periods? And given that there are gaps that the house was not rented, what is the date that you have to stop depreciation (is the 27.5 year clock runs continuously whether the house is rented or not, or only runs when it is rented?)?
Depreciation ceases when the asset is derecognized.
When to Derecognize an Asset
Derecognition of an asset in accounting refers to the removal of an asset from a company’s balance sheet, often because the asset has been disposed of, sold, replaced, or is no longer providing future economic benefits. Here are some common scenarios when you might derecognize an asset:
the depreciation base is not the fair market value of the property on the placed-in-service date. It is the aquisition cost. If you paid the property (minus land) for 10K 20 years ago and it costs 1 mil now, your depreciation basis is still $10K. This applies to machine, equipment, structure, facility etc. etc.
but does the 27 1/2 year rule start from date of purchase?
if you owned it for 30 years, and only rented for 16, then after 27 1/2 years you can not depreciate, even when you have not used 27 1/2 years of depreciations.
taxact的问题：
For your records, you may enter the total of all depreciation expense that has been claimed for Townhouse in all prior years.
假设根据straight-line 方法我每年的depreciation 是$2500, 这个total of all depreciation expense 是要把自己住的年头加进去，还是只填出租的3年。如果是前者，就要算成19年（自主16年+出租3年），就是19x $2500 = $40,000. Chatgpt 说是要算全部19年。
奇怪的是，我用了19年的总数打进去后，Taxact翻到下一页后我交税的总数没怎么减少，而我倒回去用3年的总数，到明显减少了一些。
所以，究竟改用19年还是3年？
谢谢！
depreciation starts when the property were "placed in service". The placed in service date is the start of depreciation.
The place in service date is when the property is ready for intended use. Usually it is when it is ready for showing.
you rented 1 year from 2020 to 2021, and again from 2023 to 2024.
how would you calculate the bases of depreciation for each of the two periods? And given that there are gaps that the house was not rented, what is the date that you have to stop depreciation (is the 27.5 year clock runs continuously whether the house is rented or not, or only runs when it is rented?)?
When to Derecognize an Asset
Derecognition of an asset in accounting refers to the removal of an asset from a company’s balance sheet, often because the asset has been disposed of, sold, replaced, or is no longer providing future economic benefits. Here are some common scenarios when you might derecognize an asset:
https://www.superfastcpa.com/when-to-derecognize-an-asset/
自住那几年depreciation需要停止。
the depreciation base is not the fair market value of the property on the placed-in-service date. It is the aquisition cost. If you paid the property (minus land) for 10K 20 years ago and it costs 1 mil now, your depreciation basis is still $10K. This applies to machine, equipment, structure, facility etc. etc.
if you owned it for 30 years, and only rented for 16, then after 27 1/2 years you can not depreciate, even when you have not used 27 1/2 years of depreciations.
那我只有决定就用building value了。多谢！