Author Topic: Depreciation of residential rental property cap improvement and the New Tax Law  (Read 2584 times)

dcrefugee

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I upgraded a kitchen to a rental property in February 2017.  Have tried to find the best way to handle this capital improvement to the property to depreciate over time as I plan on holding the property.  There really is not anything concrete as to how I should handle this with some articles indicating that in the haste of writing the legislation it was not completed to address residential rental property improvements.  Any direction as to where I can find more about this would be much appreciated.  Are we waiting for the IRS to write rules to address?  Thank you in advance! 

cfoleverage

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    • CFO Leverage - Real Estate Accounting/Tax Consultant
Since this was done in February of 2017, you just have to go by the old rules. The new tax cut was not retroactive, except for part of the bonus depreciation rules were retroactive to Sept 27, 2017. Since your improvement was done prior to Sept of 2017, it would be under the old rules for "qualified improvement property" eligible for 50% bonus depreciationand 27.5 yr life for the remaining basis.

Try this link for more info: https://www.forbes.com/sites/anthonynitti/2018/01/02/tax-geek-tuesday-changes-to-depreciation-in-the-new-tax-law/