how to depreciate a rental building being demolished by tenant who constuct a building to enter ground leese

In Leasing Property - Asked by sanjay s. - Jun 18, 2011
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Answer(s)

Aurelio M.
Broker/Agent
Torrance, CA

Depreciation is on the improvement. I believe you may start a new schedule but you want to talk to a CPA or tax expert.
Aurelio Mattucci
Mattucci Real Estate
www.mattucci.com

Jun 18, 2011
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Shannon S.
Owner/Investor
Lakewood, CO

I need more information to answer your question. How long have you owned the property? How much depreciation have you taken on the property? How much was the purchase price? How much was the land in that purchase price? The land is not part of the depreciation. The cost of the land is actually deducted from the purchase price when calculating depreciation. I am trying to see if the 179 rules applies. When will the bulding be demolished? You will need to look at the depreciation schedule on your previous year(s) taxes to see how your tax preparer treated the property. I will need that information as well. Depreciation is complicated and can get you audited if not handled properly.

Jun 19, 2011
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