Original cost of carpet.
Rental property flooring depreciation.
Most flooring is considered to be permanently affixed.
Since these floors are considered to be a part of your rental property they have the same useful life as your rental property.
These types of flooring include hardwood tile vinyl and glued down carpet.
100 per year age of carpet.
This applies however only to carpets that are tacked down.
I could see that for a rental property because in general a renter doesn t take care of the property like they would if they owned it.
The landlord should properly charge only 200 for the two years worth of life use that would have remained if the tenant had not damaged the carpet.
For example if you own a duplex and live in one half you can write off only the new flooring in the rental unit but not the flooring in your own personal unit.
Depreciation is a capital expense.
As with the restoration costs discussed above these costs are in the same class of property as the residential rental property to which the furnace is attached.
Expected life of carpet.
Since these floors are considered to be a part of your rental property they have the same useful life as your rental property.
As such the irs requires you to depreciate them over a 27 5 year.
It is the mechanism for recovering your cost in an income producing property and must be taken over the expected life of the property.
The first thing that real estate owners need to know about bonus depreciation is that it cannot be used on rental properties themselves.
10 years depreciation charge 1 000 10.
For property used for both business and personal purposes you can only take depreciation on the portion of the flooring used in the business side of the property.
If the carpet is glued down perhaps in a basement then it becomes attached to the property and must be depreciated over 27 5 years.
Carpet life years remaining.
Is generally depreciated over a recovery period of 27 5 years using the straight line method of depreciation and a mid month convention as residential rental property.
Bonus depreciation for rental property owners.
Now if the flooring is not carpet and if all three improvements were place in service on the same date you can actually combine all three into a single asset entry and depreciate the total 23 5k over 27 5 years.
See placed in service under when does depreciation begin and end in chapter 2.
Depreciation can be a valuable tool if you invest in rental properties because it allows you to spread out the cost of buying the property over decades thereby reducing each year s tax bill.
