Help with depreciation for condo investment

"Arco" wrote

Unless it's a floating condo.........there is some underlying land that you are part owner of. Even for condos on the 17th floor. Ask someone what percentage of the land is owned by you (in theory you own 1/the number of units on that property).

Assuming it's not an office condo.....27.5 years on a straight line begining with the month placed in service.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

You do not depreciate the land. You would need to contact a real estate agent in your area to decide if 20% of the price is the price of the land. It is the %age here. The 27.5 is correct. Missy Doyle

Depreciation applies only if you a renting the property, and not merely because it is investment property. Perhaps thought that is why you meant. The 80% factor is what somebody might have told you is the average cost of property excluding the underlying land, which cannot be depreciated. Find out the land value and then subtract it, and then, if rental property, depreciate it ovoer 27.5 years. ChEAr$$$$, Harlan Lunsford, EA n LA

I'd always heard that condos could be 100% depreciated because there was no direct ownership of the land, or the land was such a minor part. But I couldn't find a case or regulation to support that, so I suppose I was just wrong. Stu

While some real estates might be knowledgeble about area conditions and relative land/building values, I would hesitate to recommend this. Rather the local county courthouse, or whichever taxing authority pertains, will have the tax assessment as to all three factors. ChEAr$$$$$, Harlan Lunsford, EA n LA

One quick good faith way to determine the land value is to check the tax assessment. Call the tax assessor and ask how close the typical assessed value is to the actual market value. I suspect the value of the land is in the single digits relative to the overall market value of the unit; but, of course, that depends on the location.

Here in Hawaii (and maybe other places as well) many condos are built on leasehold land. I would think in that situation, the entire cost of the condo could be depreciated (assuming of course it is rental, rather than personal use). And the monthly lease payment would be deductable as well.