For my SFR rental, I depreciate the structure over 27.5 years. Can I do the same for my rental condo? I’m guessing ‘no’ since the HOA maintains the structure and I deduct HOA dues. However, the interior depreciates over time so I’m torn between both arguments.
Your help will be appreciated.
Thanks.
Why would you not be able to depreciate that which you purchased?
Technically, the HOA bits of the building you did not buy so you would not be depreciating them. You are in effect renting those bits and that HOA fee covers that.
Condo depreciation in Schedule E
You own the condo itself AND a share of the common elements. Even though the association uses your association dues to maintain the common elements, you still have an ownership interest.
Look at your property tax bill. It should allocate your property’s value between improvements and land. Take a depreciation expense for your basis in the improvements. You own the improvements, regardless of who maintains them.
You can depreciate the portion of the condo value that is allocated to the improvements. You can take a Schedule E deduction on line 18 for the condo association fees that you pay to maintain the common elements.