Jim9
Level 2
‎03-21-2020 09:13 PM

Since you can depreciate diff components if cost-segregation study is done, can you split a building's basis into commercial vs residential, based on respective sq footages, and depreciate part of it over 27.5 years and the other part over 39 years?  I read things about if 80% or more is residential rental, I may be able to take entire building over 39 years.  Not sure if it's less than 80% if you can split into 2 segments 27.5 and 39 yr properties.

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Terry53029
Level 14
Level 14
‎03-22-2020 10:59 AM

The rule is In the language of the IRS, a property is residential rental property if it derives more than 80 percent of its revenue from dwelling units.

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TaxGuyBill
Level 15
‎03-22-2020 11:09 AM

The Code says uses the phrase "any building or structure" that has 80% of rent from dwelling units.  So there is no indication that you can segregate the building, as the determination is made as the "building or structure".