Real Estate - does it calculate depreciation
I have a condo that is an investment property. It is depreciated over 27.5 years. I have positive cash flow since I have rentals (it is at the beach). When I include the depreciation it is negative which gives me an income tax loss - savings. I have entered the actual cash expenses but not the depreciation. I am not sure what to put for the basis since techically the depreciation is deducted from the basis. I put it in that way - and have it scheduled to be sold in 16 years but I am not sure if it is calculating the taxes correctly since it doesn't know what the depreciation. I took the original basis and subtracted the depreciation to date from it. This really affects my finances so I am reluctant to go farther with the program until I know the answer.
RSS
Depreciation is calculated using the 27.5 year for residential, 39 year for commercial schedule. You can find the tables here:
http://www.smbiz.com/sbrl012.html#rp
Basis is what you paid for the property.
Best,
Dick Munroe