title>Tax Guru-Ker$tetter Letter Wizard Animation

                 

Tax Guru-Ker$tetter Letter
Friday, March 31, 2006
 
Depreciating Property In Trust

 

Q:

Subject: depreciating donated property

Hi Kerry,

Thanks for sharing obscure versions of George Harrison's  Taxman.

Hopefully this question will have a quick answer.  I'll be brief.

Can a piece of real estate that is donated to a land trust be depreciated by the land trust over 27.5 years?  The property is one acre of lakefront property on Lake Ontario with a single family residence.  I'm attempting to calculate the real costs after taxes if the trust were to hold the property unoccupied.

Thank you for continuing to provide a valuable source of information.

A:

If it is trust that files 1041s, the building portion of the cost should be able to be depreciated during the time it is being used to generate income based on the value used for the transfer into the trust.  Obviously no depreciation could be claimed while it sits vacant unless a sincere effort is underway to lease it.

I'm glad you like the TaxMan songs.  Sherry found a new live version by Nickel Creek last week and I was thinking of posting it.

Kerry Kerstetter

 


- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/31/2006 10:57:00 AM Send this post:

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