skip navigation

Search Help
Navigation Help


Main Topics
A B C D E F G H I
J K L M N O P Q R
S T U V W X Y Z #


FAQs
Forms
Publications
Tax Topics


Comments
About Tax Map

previous page Previous Page: Publication 17 - Your Federal Income Tax - Personal Use of Dwelling Unit (Including Vacation Home)
next page Next Page: Publication 17 - Your Federal Income Tax - Limits on Rental Losses
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pub17/p17-048.htm#en_us_publink100032855

Depreciation(p70)


rule
spacer

previous topic occurrence Depreciation next topic occurrence

You recover the cost of income producing property through yearly tax deductions. You do this by depreciating the property; that is, by deducting some of the cost on the tax return each year.
Three basic factors determine how much depreciation you can deduct. They are: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures and equipment, as an expense.
You can deduct depreciation only on the part of your property used for rental purposes. Depreciation reduces your basis for figuring gain or loss on a later sale or exchange.
You may have to use Form 4562 to figure and report your depreciation. See How To Report Rental Income and Expenses, later.
taxmap/pub17/p17-048.htm#en_us_publink100032856

Claiming the correct amount of depreciation.(p70)


rule
spacer

previous topic occurrence Claiming the Correct Amount of Depreciation next topic occurrence

You should claim the correct amount of depreciation each tax year. Even if you did not claim depreciation that you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted.
If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U.S Individual Income Tax Return. If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. See Claiming the correct amount of depreciation in chapter 2 of Publication 527 for more information.
taxmap/pub17/p17-048.htm#en_us_publink100032857

Changing your accounting method to deduct unclaimed depreciation.(p70)
spacer

To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. In some instances, that consent is automatic. For more information, see chapter 1 of Publication 946.
taxmap/pub17/p17-048.htm#en_us_publink100032858

Land.(p70)


rule
spacer

previous topic occurrence Land next topic occurrence

You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated.
taxmap/pub17/p17-048.htm#en_us_publink100032859

More information.(p70)


rule
spacer

See Publication 527 for more information about depreciating rental property and see Publication 946 for more information about depreciation.
taxmap/pub17/p17-048.htm#en_us_publink100032860

Other Rules About 
Depreciable Property(p70)


rule
spacer

Rules About Depreciable Property

In addition to the rules about what methods you can use, there are other rules you should be aware of with respect to depreciable property.
taxmap/pub17/p17-048.htm#en_us_publink100032861

Gain from disposition.(p70)


rule
spacer

Gain from disposition.

If you dispose of depreciable property at a gain, you may have to report, as ordinary income, all or part of the gain. See Publication 544, Sales and Other Dispositions of Assets.
taxmap/pub17/p17-048.htm#en_us_publink100032862

Alternative minimum tax.(p70)


rule
spacer

previous topic occurrence Alternative Minimum Tax next topic occurrence

If you use accelerated depreciation, you may have to file Form 6251. Accelerated depreciation can be determined under MACRS, ACRS, and any other method that allows you to deduct more depreciation than you could deduct using a straight line method.
previous pagePrevious Page: Publication 17 - Your Federal Income Tax - Personal Use of Dwelling Unit (Including Vacation Home)
next pageNext Page: Publication 17 - Your Federal Income Tax - Limits on Rental Losses
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication