Furnace depreciation

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  • RWG1950
    Senior Member
    • Nov 2017
    • 458

    #1

    Furnace depreciation

    My customer operates a daycare business out of her home.
    In 2018 she had a new gas furnace installed.
    What period of time would be appropriate for depreciation of this asset ?
  • taxmom34
    Senior Member
    • Nov 2008
    • 732

    #2
    daycare business percentage, cant take 100% there is some personal use

    Comment

    • Twin Turbo Z
      Senior Member
      • Feb 2014
      • 372

      #3
      15 - 20 year average life of furnaces now a days. Dont make them like they use to.

      Comment

      • RWG1950
        Senior Member
        • Nov 2017
        • 458

        #4
        Thanks for your comments.
        I'm aware that only the business % can be used to calculate the depreciation.
        I'm also aware that furnaces may not last as long as they used to. (maybe 15 to 20 years)
        What I was asking was what number of years does IRS specify for depreciating this type of asset for business use
        10, 15, 27.5, 39 ?

        Comment

        • Twin Turbo Z
          Senior Member
          • Feb 2014
          • 372

          #5
          15 or 20 is the answer. Residential I would use 20

          Comment

          • TaxGuyBill
            Senior Member
            • Oct 2013
            • 2320

            #6
            It is 39 years. You can't choose how long to depreciate it based on how long you think it will last.

            A furnace is considered part of the property, and like the building itself, it is depreciated over 39 years (for nonresidential property).


            On the other hand, it probably qualifies as "Qualified Improvement Property". Although Congress MEANT that to be depreciated over 15 years, due to an error in the Tax Cuts and Jobs Act it is still 39 years.

            Comment

            • Twin Turbo Z
              Senior Member
              • Feb 2014
              • 372

              #7
              Actually 27.5 for residential rental. 39 is commercial. The original post is neither. But hey, Bill knows best !!! Not getting into a peeing contest over this. Have a great day !!

              Comment

              • TaxGuyBill
                Senior Member
                • Oct 2013
                • 2320

                #8
                It is 27.5 years for "Residential Rental Property" and 39 years for "Nonresidential Real Property".

                Real estate that does not qualify as Residential Rental Property is Nonresidential Real Property. So if it doesn't qualify as Residential Rental Property, it is 39 years.

                Comment

                • RWG1950
                  Senior Member
                  • Nov 2017
                  • 458

                  #9
                  I was aware that the business use portion of the residence is 39 year property.
                  I just didn't know if the business percentage use for the furnace would also be depreciated over 39 years.
                  Thanks all for comments

                  Comment

                  • Twin Turbo Z
                    Senior Member
                    • Feb 2014
                    • 372

                    #10
                    Sorry Bill, Stand corrected. I would say yes to dep. of % business use. With average cost of furnaces, then it would not amount to much (at 39 years). Of course that depends on % of home use.

                    Comment

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