Question

how much is depreciation for a business building? is it 27.5 or 39?

how much is depreciation for a business building? is it 27.5 or 39?

Homework Answers

Answer #1

Commercial and residential building assets can be depreciated either over 39-year straight-line for commercial property, or a 27.5-year straight line for residential property as dictated by the current U.S. Tax Code. The Internal Revenue Service (IRS) allows building owners the opportunity under the Modified Accelerated Cost Recovery System (MACRS) to depreciate certain land improvements and personal property over a shorter period than 39 or 27.5 years. Certain land improvements can be depreciated over 15 years at 150% DB, with certain personal property depreciated over 7 or 5 years at 200% DB. This depreciation analysis is known as a cost segregation study.

Therefore, depreciation for a business building is 39-year straight-line as it falls under ambit of commercial property.

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