Hi Everyone

I posted a message about amt taxes , and if i had a llc would this help me , someone answered back that i should deprecate my house over 39 years instaed of 27.5 is this possable and if it is how can i change it now i have been depracating somehouse over 5 years now.


There are two systems for depreciating your property – the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). For most rental activities the default is GDS unless you elect ADS. Under GDS, residential rental property has a 27.5 year depreciation schedule. Under ADS, the depreciation schedule is 40 years. The 39 year depreciation schedule is for commercial property.

It is my understanding that you elect the depreciation system to use at the time the property is placed in service. I suspect that you can change from GDS to ADS after the property has been placed in servicer, though I can’t confirm this. Once you elect ADS you cannot change to GDS.

If you do change, the excess depreciation taken under GDS reduces your basis in the property.

An LLC is generally tax neutral. That is, your personal tax liability is not affected by the absence or presence of an LLC.

Consult with your CPA for specific details as they may apply to your situation.