Depreciating Mobile Homes


#1

Hi Everyone,

I was just wondering how someone would go about not depreciating a rental

mobile home. If I report income as rental income, do I have to depreciate the

home?

If I do, is it better to report the rental income as business income so as not to

have to depreciate the mobile home if I don’t want to? Does it make a

difference if the income is reported as business or rental? The rental is in the

name of the business.

Thanks so much for your help!

-Rachel


#2

Rachel,

Why would you not want to depreciate a rental? Depreciation is a good thing in that it will lower your current tax bill. My biggest question is what schedule to use. It seems like personal rental property is 29.5 years, but I’ve heard on this board 7, and 15 years as well. Will I get in trouble with the IRS for using too fast of a schedule?


#3

rachel,

you have to depreciate a rental property. the irs will do it when you sell and you will pay capital gains on the lower basis. you will not be able to redo your income tax after 3 years, and it will cost you more. depreciation will reduce your income tax on the rental income.