Furnace depreciation

[RWG1950]

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]

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

[Twin Turbo Z]

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

[RWG1950]

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 ?

[Twin Turbo Z]

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

[TaxGuyBill]

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.

[Twin Turbo Z]

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 !!

[TaxGuyBill]

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.

[RWG1950]

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

[Twin Turbo Z]

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.