New Client 06 Odd Depreciation Election.....

[AZ-Tax]

New Client placed Residential Rental Real Estate in service 9/1/06 and 06 form 4562 has a 20 yr recovery and HY/150DB (method/convention). $185,900 basis with $6,971 of 4 months depreciation in 2006.

So when I tried to match this in my "Asset Entry Wksht", it generates $13,420 depreciation for the year of 2007.

Something does not look correct and yes I included prior depreciation

[DonPriebe]

The amount is correct, but ...

For 20 year 150% declining balance depreciation with a basis of $185,900 ...

The first year (2006) would be $185,900 x 1.5 / 20 = $13,942 for the whole year or $6,971 for six months using the half-year convention.

The second year (2007) would be (185,900 - 6971) x 1.5 / 20 = $13,420

So the calculations are correct. But the only type of property that I see listed for 20 year MACRS is farm buildings. That's one fancy chicken coop that he's renting out to the city folks.

[les grans]

This is the "Casa de Pollos" - it's a really really ritzy condo building. A lot of layers and fryers and coupla hot chicks live there.

But I think the 20-year DDB [or was it just DB?] real estate went out of fashion in the 1980s....!