All Forum Posts by: Jonathan Cooper

For short-term rentals (STR), the IRS requires you to prorate NORMAL depreciation based on the time the property is available for rent, not when you purchased it. In your case, since the property was under remodeling until the end of August, you would start depreciation when it was available for use as a rental, likely in September. So, you would only be able to take about four months of depreciation for this year.

However, the bonus depreciation is not prorated.

"However, the bonus depreciation is not prorated" is a very clear answer. Does the tax code say this directly or is this inferred from the mechanics of the bonus depreciation calculation?

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Quote from @Basit Siddiqi:

The good thing about bonus depreciation is that you can take the amount eligible for bonus depreciation in that given year.

For example - if you place a $50,000 item under 5 Years MACRS on December 31st, it would be eligible for bonus depreciation which as of right is now 60%. The remaining 40% has to be prorated.

If you are not working with an accountant focused on real estate and you are focused on real estate, it may not be a good fit.

Thank you.

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I do, but he is not experienced with short term rentals and cost segregation studies. His initial opinion is that it has to be prorated but that is contrary to what I have heard on YouTube.

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Purchased a STR in February. Worked on the remodel until the end of August. Once the cost segregation study is complete, will I be able to take a full year of depreciation or only a prorated 4 months? I have seen a tax attorney on YouTube specifically saying you can take a full year of depreciation even if you buy in December but all I see in the IRS publications indicates that you have to prorate based upon the time it was available to rent.

is there a rule I am missing?

Thanks for your time.

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All Forum Posts by: Jonathan Cooper

Jonathan Cooper has started 1 posts and replied 4 times.

Post: Prorated depreciation for str

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