Depreciation on inherited items

[RWG1950]

My taxpayers are elderly sisters living together but they also jointly owned a single family rental property. Had been filing an "E" for each.
In August 2019 the older sister died leaving her 1/2 of the rental to her younger sister.
In addition to the house, a refrigerator, washer, dryer & other items had been added later & were also being depreciated.
The house depreciation for the heir is pretty straightforward but how would one handle the depreciable basis for the above items ?
Appreciate you comments.

[rbynaker]

The same concepts apply.

For the house, the younger sister will continue to depreciate her "original" half over its current schedule. The inherited half will get a step-up (or -down) in basis to FMV and begin depreciation over a new 27.5 year period.

For the appliances, if they were previously split 50/50, then the original half continues on its schedule, the inherited half starts with FMV on date of death and depreciates over a new 5-year period. I'd have to check to see if eligible for bonus depreciation.

Rick

[RWG1950]

How does one determine a FMV figure for the inherited 1/2 of the appliances for depreciation purposes ?

[rbynaker]

How does one determine a FMV figure for the inherited 1/2 of the appliances for depreciation purposes ?

SWAG?

In a perfect world, the client would determine that using a reasonable method. Here in the real world, I'll sometimes just use the remaining tax basis if that's reasonable (but with 100% bonus depreciation that's sometimes $0), or try to search for a similar model used appliance on ebay. Or "what would I be willing to pay for a used refrigerator?" If you're plugging something in and it's not ridiculous, I can't imagine the IRS is going to challenge it under audit.

Rick