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Updated almost 6 years ago,

User Stats

27
Posts
9
Votes
Milos N.
  • Software Engineer
  • Oakland, CA
9
Votes |
27
Posts

Basic depreciation understanding self check

Milos N.
  • Software Engineer
  • Oakland, CA
Posted

Hello gurus,

I am trying to teach my self how does this all work. please let me know if my understanding is off.

Yes, I know I should hire a professional, but I like to understand things my self.

Facts: property bought in 2018

before being put into service some work on it have been done:

- $5000 on floors

- $1000 on carpet

- $1000 appliances

- $7000 random (paint, door fixes, wall fixes, bathtub re-glazed and other things).

I understand that all of this needs to be capitalized because it was done before it was put into service.

After putting into service (tenants in, etc.) more things were discovered around $2000 cost.

This is what I am thinking:

 - capitalize and depreciate the floor, carpet, and appliances separately over shorter time period (5 and 3 years).

-  capitalize and depreciate $7000. Add it to the improvement cost of the building and depreciate it over 27.5 years.

$2000 write of as repairs, because it happened after it was put into service.

Does this sound reasonable?

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