Can you take deprecation on a rental being purchased on land contract?

Forum|Forum|3 years ago
April 6, 2023
3 replies
27 views

Client sold rental and bought second rental on land contract. Does not qualify for like kind due to not identifying 2nd property within the 45 days. New rental is being bought on land contract, and since the client doesn’t technically own the property can they take depreciation?

ProSeries Professional

This topic has been closed for replies.

dkh

Level 15

I say yes. I don't see it as being any different than owing money to a bank for purchasing real estate.

T

taxes96786

Level 8

By land contract, if you mean that the building was purchased but the land is leased, then yes for the building.

qbteachmt

Level 15

"Does not qualify for like kind due to not identifying 2nd property within the 45 days."

And, did not shelter this through an escrow agent? And, touched the money directly (got the proceeds in hand)? Like property and date range are only part of the picture; you can buy and then sell, or sell and then buy. But doing it yourself bypasses 1031 exchange, by definition.

"doesn’t technically own the property can they take depreciation?"

Do they have the use of it?

Don't yell at us; we're volunteers

sjrcpa

Level 15

@Tracie415 Define land contract, please.

We don't have them in my part of the country.

I think it means title does not transfer unless and until the last payment is made.

The more I know the more I don’t know.

Sign up

Login with SSO

Let's get you signed in

Login with SSO