Tax question.... Depreciation of foreign rental property
#1
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Joined: Jan 2013
Posts: 219
Tax question.... Depreciation of foreign rental property
Tax question! Yes I know we're late, but we have an extension!
We own and rent out our property in the UK.
My understanding is that I report this income on schedule e. I'm now looking at depreciation on this. I know it has to be depreciated over 40 years because it's overseas and that I can only depreciate the buildings, not land. How to I work out how much of the purchase price relates to land and how much to buildings?
Have failed in my google search
Thanks
Sarah
We own and rent out our property in the UK.
My understanding is that I report this income on schedule e. I'm now looking at depreciation on this. I know it has to be depreciated over 40 years because it's overseas and that I can only depreciate the buildings, not land. How to I work out how much of the purchase price relates to land and how much to buildings?
Have failed in my google search
Thanks
Sarah
#2
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Thread Starter
Joined: Jan 2013
Posts: 219
Re: Tax question.... Depreciation of foreign rental property
Oooh just found an old thread on here! Deduct 20% for land cost? Thanks
#3
Re: Tax question.... Depreciation of foreign rental property
20% is a good starting point, but can/should be adjusted if there are other factors in play. For example if the land has redevelopment potential (unlikely in the UK given the rigidity of planning permission) the percentage for the land might be higher, or if the house is especially grandiose but is in an undesirable part of town, then the percentage for land might be lower.
#4
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Joined: Jan 2013
Posts: 219
Re: Tax question.... Depreciation of foreign rental property
Thant's really. Helpful. It's a normal house in a small market town. Big ish garden, but certainly couldn't sell off a bit and build on it or anything.
The other thread (and your contributions on it) was really helpful. As was that. Thanks. Don't know what I'd do without this forum!
The other thread (and your contributions on it) was really helpful. As was that. Thanks. Don't know what I'd do without this forum!