Depreciation Basis for a primary residence that i now rent

[Kim Leduff]

Hi BPers!

I bought a place 10 years ago for 230K and decided to rent it out this year when I moved.  This year I get to start deducting depreciation on it on my tax return. What is the basis I should be using to track the depreciation? Is it the 230K (assuming building-only, ignoring land for simplicity) or is it something lower since its already been around 10 years? Do I need to back out the 10 years of depreciation from the 27.5 asset life in order to calculate this year's deprecation (as in using the depreciation figure from Year 11 out of 27.5)? 

Also, Does a cash-out refi change the equation? I did a cash-out refi two years ago and now the debt is 250K & FMV 500K.

Thanks!

[Frank Chin]

@Kim Leduff

Simply put:

1. Basis is what the building value you paid for it regardless of how many years ago it was.

2. Depreciation of 27.5 years starts when you rent it out, not from date of purchase.

3. Cash out refi has nothing to do with it.