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Kaplan123, Home Buyer in Fremont, CA

Is there a way to claim depreciation on investment property?

Asked by Kaplan123, Fremont, CA Sat Apr 25, 2009

Also how to change a orimary residence to investment property. i am having to move from LA to Bay area for job.

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Bob Khalsa’s answer
Depreciation is only claimed on the value of improvements (structure) and not on land value. The tax assessor gives you the breakdown between the two. However, when you convert the property from primary residence to investment property the cost basis will not necessarily be the same as when you bought it. Your accountant should be able to explain it. Another thing to remember is that the income you will get from the property will be "Passive" income; in comparision, the income you get on say a W-2 or 1099 basis is "Active" income. Do make sure you ask your accountant to explain how that can affect you especially in terms of offsets and carry forward losses.

Bob Khalsa
Certified Commercial Investment Member
United America Realty
0 votes Thank Flag Link Sun Apr 26, 2009
Yes, Kaplan, there is more than one way. Consult with your accountant to find out what will be best for you. When you legally change your residence and rent the property out, it will be investment property.
0 votes Thank Flag Link Sat Apr 25, 2009
Homa is correct. The answer is YES. And - you need to speak with an accountant. I'm doing the same thing but my primary also has rental units.
0 votes Thank Flag Link Sat Apr 25, 2009
Kaplan- Yes, you definately can claim depreciation. Your accountant can tell you the best way to do so. Be sure to use someone who can tell you all of the write offs that you are entitled to.


Patti Phillips
"Advice You Need, Attention You Deserve"
0 votes Thank Flag Link Sat Apr 25, 2009
Hi Kaplan123,

Yes these is a way to claim depreciation on investment property and once your property produces income(when you rent it) you will have investment property.

You need to consult with an accountant.


0 votes Thank Flag Link Sat Apr 25, 2009
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