Depreciation Example

Hi people, first post - hope I am not out of line on this!
This board is incredible, I’m suprised I havent found it until now.

I was searching for details about decpreciation and what can be claimed on my taxes and how it works.

Currenlty, I have 3 sfu’s (local and being moved to llc), very close to adding another as a vacation home. It looks like I’ve been missing out largly on deductions, and I’m looking to get more educated on it.

I’m hard headed and like to do my own taxes. I have not taken any depreciation on my properties as of yet (I got the first one almost 3 years ago)… better late than never, I suppose.

In reading form 4562, page 15 table C shows an interesting depreciation table for a residental (27.5 years). The interesting thing is the 1st year adds up to ~23% of the total value, and years 2-9 add up to nearly 40% each! Surely I am reading this wrong??

I’ve read many threads on here the past few years concerning depreciating the property (the structure, as the land doesn’t count), and the examples I have seen are doing the value / 27.5 to get the depreciation amount… which will be very different than the above way of doing it.

Examples are how I like to learn, so I’d like to offer some numbers. On 1 of my sfu, the building tax card is 49960 for 2006. I actually got the mortgage on this for 15 years, so the cf is slighly negative in a years time (200) (hey, I was a true rookie). Given that I have not been taking this deduction, it looks as though the cf could actually be positive.

Theres thousands more threads for me to get caught up on, but I wanted to throw this out there.

Thanks for the future education!