Asset Life

[Fernando]

s About Taxes)/asset life Advertisement Expert: Karen Brawner - 4/6/2004 My question is regarding the life of a retaining wall.

It is for a residential rental property.  It finished or placed in service in October 2003 and total cost is $22,000.  

My question is is this considered a land improvement and depreciable over 15 or 20 years, or does it have to be depreciable over 27.5 years.

Can this qualify for the 50% bonus depreciation also?

Thank you George

[Garrity]

Dear George,   First of all, the value of the land is NOT depreciable....  So, you must use 27.5 years for ALL buildings(the house) and structures(other buildings on the rental property like well house, storage sheds etc) AND structural compnents(furnace, water pipes, venting etc)... In YOUR case, this retaining wall is treated just like any any other improvement to LAND.... It is NOT depreciable... You will add this amount to the COST basis of your land only and use it IF/WHEN you sell this house.... Also, any grading, planting or landscaping(retaining wall would be considered landscaping, just like putting in a driveway) are NOT depreciable, but figured into the cost of the land...

Thank you,   karen