Discussion:Rental Property - Est Life and Depreciable?

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Discussion Forum Index --> Advanced Tax Questions --> Rental Property - Est Life and Depreciable?

Discussion Forum Index --> Tax Questions --> Rental Property - Est Life and Depreciable?

Dude7707 (talk|edits) said:

4 May 2011
Residential Rental Property w/following transactions:

1. New Lawn Mower $1,408 - Macrs 5yrs?

2. Drainage culverts - $2,200 - Macrs - 15yrs?

3. Planting Trees - $135 - Macrs - 15yrs?

4. Fixtures - $250 - Macrs 7 yrs?

RE: #2 - $1,600 Pd 10/10 and additional Pd 12/10

Do you use 10/31/10 as Place in Service date or do you list them separately? Or just show all as 12/31/10?

Are These The Correct DEPR Methods And EST Life For The Above Items?

Thank you for your time.

Solomon (talk|edits) said:

4 May 2011
Placed in service. You really want to depreciate $135 for 15 years.

Bigbrother (talk|edits) said:

4 May 2011
For a residential rental property, the fixtures (cabinets, countertops, awnings, carpet, etc.) should be 5 years.

Dude7707 (talk|edits) said:

4 May 2011
Solomon actually no..this is what my employer wants, my recommendation just expense it as say Misc Exp, even though I don't like recording items here.

Marcilio (talk|edits) said:

4 May 2011
Trees & shrubbery that are next to the house & would be destroyed if the house were torn down are considered part of the house and are depreciable. Trees that stand alone and are ornamental and would not be destroyed are part of the land and not depreciable.

MN Cindy (talk|edits) said:

6 May 2011
You should establish a minimum threshold (Dollar amount) of items that should be capitalized versus expensed. Does it make sense to capitalize a $135 item? How many of these $135 items will you be running depreciation schedules for 10 years from now? Is the time and labor of tracking these items worth it? Most rental repair bills for toilets, bathroom fixtures etc are going to run about $250-500 unless you do the work yourself. Do you really want to capitalize each of these? Replacing these items are normal in the rental industry, and expensing a $250 repair bill is quite normal. What's your employer's rational for capitalizing them? If this were my client, I would suggest capitalizing items #1 an 2, and expensing #3 and 4. The trees can be deducted as landscaping expenses, and the fixtures are repairs.

Taxea (talk|edits) said:

6 May 2011
fixtures for this amount...are they replacements/updated that do not increase the value...I would expense under maintenance.

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