What IRS form is used to report depreciation for a new air conditioner in a residential rental property?
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For a new air conditioner installed in a residential rental property, depreciation is reported on Form 4562, Depreciation and Amortization. This form is used to claim depreciation deductions for property placed in service during the tax year, including improvements such as a new air conditioning system. The annual depreciation deduction calculated on Form 4562 is then carried to Schedule E (Form 1040), Supplemental Income and Loss, which is where rental income and expenses—including depreciation—are reported for residential rental properties.
Key points:
- Form 4562 is required for depreciating property placed in service during the tax year, including capital improvements like a new air conditioner.
- The cost of the air conditioner (including installation) is capitalized and depreciated over 27.5 years under MACRS for residential rental property.
- The depreciation deduction from Form 4562 is entered on Schedule E, which summarizes all rental income and expenses for the property.
Summary: Depreciation for a new air conditioner in a residential rental property is reported on Form 4562, and the resulting deduction is included on Schedule E (Form 1040).
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