Depreciation - Which software to use

[Kim Leduff]

Hi! How are you guys tracking your deprecation? Which software are you using? Or are most of you strictly relying on your CPA? Id like to track myself and be aware of my tax deductions. 

Thanks in advance for your help :)

Kim

[Steve Vaughan]

Originally posted by @Jonathan W.:

@Kim Leduff

Will be on you tax forms but it is just Purchase price - land value = depreciation total. Divide by 27.5. No spreadsheet needed. You do add capital spend back in if you did any before renting. After it would be another line.

Yup. For land value, I take the assessor listed ratio.  For example, my last buy was for $277k + $3k getting it ready to rent (before placing it 'in service'). 

Assessed land value was $40k.   40/188 (Assessed value) gave me my %  (21.27%) of purchase price to apply to land ($59k). Subtract the land value = $221k and divide by 27.5   ($8036/yr) for a residential house or plex up to 4 units.

Then prorate the first year to day of purchase out of 365.    Apply that % to the result of your annual 27.5 yr depreciation.  Building depreciation won't change until you sell and again have to the day sold / 365. Years 2 on in the meantime will stay the same $8036.  

Capital goods/improvements like appliances, mechanical, flooring, a roof, siding , driveway, etc will have their own schedules as mentioned, but the building depreciation is straight line and easy.