Inherited Property and Depreciation

[Les Jean-Pierre]

Hi, I know the rule is if a person inherits a property there is a stepped up basis for capital gains purposes. Does the same rule apply to depreciation? The property in question is purely a rental and would stay that way. Would the person inheriting the property be able to start the depreciation clock over and at a current FMV for the property in question? Thanks

[Ashish Acharya]

Originally posted by @Les Jean-Pierre:

Hi, I know the rule is if a person inherits a property there is a stepped up basis for capital gains purposes. Does the same rule apply to depreciation? The property in question is purely a rental and would stay that way. Would the person inheriting the property be able to start the depreciation clock over and at a current FMV for the property in question? Thanks

Yes, if the property is continued to be a rental property, the depreciation is computed using the FMV as of the death.

The property normally is depreciated under the depreciation rules in effect when you acquired regardless of when the property was first placed in service. So, yes clock starts over.