Depreciation Tax Laws for Rental Property

Written by connie s owens | 13/05/2017

The depreciation tax laws for rental property are clear in regards to the types of rental properties you can depreciate. The most important one is that you own the property and use it for income. Any rental property is eligible as long as it has a determinable life for use. The rental property can be used for business or residential purposes, and includes the furnishings such as appliances and other equipment.


Depreciation tax laws for rental property allow you to recover some of the costs of the income each year through tax deductions. Depreciation is the process of reducing the cost each year of the rental property.


You cannot deduct mortgage payments, furniture, appliances, etc each year. The amount of yearly depreciation depends on your starting point in the property, the recovery period and depreciation method used.


If your property meets certain requirements, then you can use the depreciation for rental property. These include the property is used as income either for business or residential rentals, it will last for more than a year, has a determinable life, and you own the property.


Depreciation tax laws for rental property involves cooperative apartments where you are a share/stockholder in the property, or rented property that you have made improvements upon (see Resources for further information). Another qualification is property you own and use as a source of income.


The basics of depreciation tax laws for rental properties cover the types of property, methods of depreciation, inclusions and exclusions. The IRS has a publication that includes more detailed information (see Resources).

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