A new client has taken bonus depreciation for the renovation of a kitchen in a residential rental property. The method of depreciation was 200DBHY-7. It is my understanding that bonus depreciation can not be used on residential property and since it is an improvement, should be depreciated for 27.5 years. In 2020 the client sold the property and I am trying to recapture the bonus depreciation. The bonus depreciation was taken for 2019. How can I rectify this situation?
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I believe it self rectifies because ALL depreciation gets recovered upon sales and most likely will be ordinary income, subject to profit or loss.Last edited by BOB W; 04-08-2021, 11:42 AM.This post is for discussion purposes only and should be verified with other sources before actual use.
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He can use it but will he wish he didnt? Depends on the numbers and opportunity cost.Last edited by Dude; 04-08-2021, 11:24 AM."Dude, you are correct" Rapid RobertComment
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