[MD] ground rents and depreciation

[Ari Bachrach]

This is probably a Maryland specific question as I don't of any other states that do ground rent the way MD does.

My understanding is that is you buy a property in MD subject to ground rent then you can depreciate the entire purchase price and don't have to segregate out the cost of the land because you didn't actually buy the land. (If I'm wrong, please let me know).

What happens when you redeem ground rent after the purchase? Can you continue to depreciate the entire purchase price since the land was purchased separately, or does the conversion to fee simple then put the "normal" rules of separating out the land from the improvements into play?

[Matt Schelberg]

@Russell Brazil Yes, I have many rentals with ground rent.  Unfortunately, ground rent does not affect depreciation.  Owning a ground rent deed is not the same as owning the land.  For example, you can own a vacant lot that also has ground rent due.