Video instructions and help with filling out and completing Will Form 4797 Calculator

Instructions and Help about Will Form 4797 Calculator

Welcome to another edition of Tuesday tidbits where we make Tax and Accounting simple I'm your host Charles D Shapero CPA with widget bookkeeping and tax and today we're going to talk about the depreciation of real estate a lot of people a lot of our clients buy rental real estate whether it be commercial or residential and that's really how they're broken out when you depreciate residential real estate say we have a an apartment building that we're renting that building gets depreciated over twenty seven and a half years if you're doing commercial like a strip mall that is 39-year property but that's not all I just kind of lump them into two baskets when we buy a rental house there are several things we're buying we're buying the house we're also buying land the land that that property sits on we're also buying some appliances in that building and maybe some land improvements so now I've just chopped this one asset that we said was going to be depreciated over twenty seven and a half years and I've chopped it up into several different categories the appliances appliances when you buy them are five-year assets that's a lot more rapid right off than taking twenty seven and a half years so to the extent that we have appliances we probably want to break them out I also mentioned land land is not as happy as appliances because land we can't write off at all land does not depreciate so let's just say we spend 200 grand on this house maybe 20 thousand of that relates to the land which we'll never be able to write off until we sell the property so no depreciation on land I mentioned land improvements that'd be like a parking lot or a fence those items are written off over 15 years so we don't have to wait 27 and a half years to write them off commercial has many of the same items but they're basically 39 years if you buy a big enough property say we buy a strip mall for half a million dollars one of the things that we can do to accelerate our depreciation and speed it up is to hire a cost segregation specialist what that is is he's an engineer that will go in instead of seeing this building as a 39-year asset he'll chop it up into pieces like I did over here at the residential he'll say oh those ceiling tiles those are five-year property and this electrical runs this that's that's five-year property and this is seven-year property so instead of calling it 39 years we're writing different buckets of items over off shorter periods of depreciation which really accelerates our write-off this concludes today's Tuesday tidbit see you next Tuesday widget bookkeeping & tax know more keep more