accelerated depreciation

I think what your accountant was referring to is called cost segregation. I have done this before for a client who just bought into a large apartment complex. My cost segregation was to separate the appliances and plumbing fixtures from the building itself and depreciation those over 7 years. To do full, formal cost segregation takes an engineering firm like the one I was trained by and an analysis of the plans of the building. They will segregate the heating and air conditioning systems, the waste water systems and other structural components that may be separately depreciated. These studies and the voluminous report are costly and are best done by the developer of a complex when it is built. I can refer you to the firm if you wish. Linda Dorfmont E.A., CFP, CSA

Accelerated depreciation means that you take the same amount of depreciation, but take more in early years and less in later years. Check with your tax preparer for more information. Stu

depreciation on real property is pretty much cut & dry depending on whether it is residential or not determines which depreciation schedule to use accelerated depreciation on real property is something that is in the past -it existed once upon a time ___________________________________

-----> real address on hobokeni or hobokenx

A lawyer told you that, eh?

Well, steer clear of that fellow, for real estate is depreciated on straight line method over 27.5 years. Period. There is no acceleration like there used to be. ChEAr$, Harlan Lunsford, EA n LA

Andrew_Bitler wrote: [snip]

If you are eligible to use up to $25K passive losses to offset ordinary income, you might want to break out the components of your rental properties into their appropriate depreciation life classes, for example appliances are typically 5-year personal property rather than 27.5 year residential real estate. This is one way of accelerating your depreciation. Also be sure you have correctly allocated building vs. land basis. At a sufficiently high income level and depending on your filing status, this offset will be limited but may be carried forward to future tax years.

-Mark Bole

First, making ANY investment with the primary goal of saving taxes is generally not a good idea. You should always make an nvestment based on the merits of the investment itself and THEN consider the tax implications and ways to minimize liabilty, maximize benefit, etc and also be sure the investment compliments or otherwise fits into your overall portfolio strategy. Paying for professional guidance in this area is always worth it (assuming you retain competent advisors).. Second, all of the previous replies gave good advice. The cost segregation analysis is worth it if your investment is large enough, however, if the 2 rental properties you mentioned are single-family or duplex type housing, then it's probably not worth doing any more than segregating and allocating a reasonable portion of the purchase price to the major appliances and depreciating over 7 years. Third, it sounds like you're getting into more areas of business and taxation than you're qualified to handle yourself. No matter how many forums you join, you cannot get the level of professional assistance in on-line forums that you need to properly handle your business & tax affairs. Making mistakes is very costly, get professional assistance, it will be money well spent.