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Depreciation for mixed-use (commercial/residential) building

Jim9
Level 2

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

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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2 Comments 2
Terry53029
Level 14
Level 14

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.

TaxGuyBill
Level 15

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".