Depreciation for Commercial and Residential Property

Depreciation - What you need to know... Of all the benefits of owning investment real estate, one of the least understood is the benefit of depreciation. Depreciation is a method for matching the costs of acquiring property over the properties estimated economic life. Some key things to remember:
Using the straight-line method, residential income properties, four units or less, are depreciated over 27.5 years. Commercial property, or 5 units or more, are depreciated over 39 years.
Land is not depreciable.
Depreciation is an "intangible expense" that reduces the taxable rental income produced by a property.
Selling a property will result in a 25% depreciation recapture tax.
The depreciation recapture tax can be deferred via a 1031 Exchange.
For more detailed information about depreciation and how it works, please click here.

All in the family... You can't choose your family, but you can choose if you want to pay taxes or not when dealing with your family. Some key things to keep in mind regarding intra-family real estate dealings:
Adding a family member (or anyone for that matter) to title may result in a gift tax. Don't ever add your son/daugther/mother/daugther/etc. to title without speaking with your tax advisor.
Renting a 1031 Exchange property to a family member is allowed; just make sure the family member is paying market rents.
Selling a 1031 Exchange property to a family member is allowed, provided the family member then owns the property for at least two years.
Buying replacement property from a family member is usually not allowed. There are some exceptions. Contact Asset Exchange Company as soon as possible if you are considering acquiring replacement property from a family member.

Asset Exchange Company
Asset Exchange Company leads the industry by offering:
$499 Exchange - With Asset Exchange Company there are never any hidden fees, layered costs or miscellaneous service charges.
Attorney Guarantee - Asset Exchange Company is the only firm in the industry that guarantees that all exchange documents are prepared and reviewed by a licensed attorney.
Funds Security - Exchange funds are deposited into FDIC insured trust accounts with leading financial institutions. Client exchange funds are never commingled with operating funds and Asset Exchange Company also carries substantial Errors and Omissions insurance and maintains a Fidelity Bond for added protection.