222

$show=home

Founder of Accounting Education

Online Accounting Course 

Achieve one of the highest distinctions in the accounting management profession: Become a Online Accountant. As an Online Accountant, you will have the knowledge and the skills to thrive in the competitive accounting industry.

The Online Accounting course gives you expertise and real-world skills in accounting analysis. Join more than 100,000 professionals who have been recognized globally for their commitment to ethics and professionalism.











$show=home

Welcome to Accounting Education

The Accounting University with 3400+ Accounting contents as study material which can watch, read and learn anyone, anywhere.

Start your studies

$show=home

Latest $type=blogging$count=10$author=hide$comment=hide$label=hide$show=home$date=hide

How to Calculate the Depreciation on Rental Property

There are two benefits of calculating depreciation on the rental property. One is, it will decrease your total taxable income. Second is, you can make plan of repair or new improvement after lapse of active life of property. So, if you want to get above two benefits, you should calculate the depreciation on your rental property.


There are lots of tool which can calculate the depreciation, if you will add the information of the value of your rental property and active life. So, today will teach you the steps to calculate if you have to calculate manually.

Steps to Calculate Depreciation on Rental Property:

1st Step : To Calculate Rented Property Area

You can depreciate the property which is given for rent. You can not depreciate your personal property for your income tax purpose. Measure the area which being used for your renting business. For example, it may be 50% or 60% or any % of total area. It is helpful for calculating the cost of your rental property.

2nd Step : To Calculate the Cost of Building

We calculate the depreciation on the structure of building not on land of building. If you have total cost of property including the land, you should deduct the cost of land. If you have done any improvement before giving it on rent, you will add in it. You will calculate the cost of rental property on the basis of rental area which we have calculated in first step.

3rd Step : To Calculate Annual Depreciation 

There are different system and methods of calculating depreciation in different country. In India, we use diminishing method of calculating depreciation with 10% rate or any updated rate by income tax department. In other country, it is calculated with straight line method and on the basis of the active life of rental property. Generally, we divide the cost of rental property with 27.5 years.

Example : Suppose, we have duplex and its cost is $ 3,15,000. Half of this, we are using for personal use and half for rent.Total cost of land which is used, is $ 2,00,000. Total improvement cost is $ 15,000. Now, will calculate its annual depreciation with following way.

 Rental Property Depreciation Calculation
In Dollar
Total Cost of Property 315000
Less Cost of Land 200000
Less Cost of Improvement before place in service 15000
- 215000
100000
Less Cost of Property for Personal Use (50% of total area) 50,000
-50000
Cost of Rental Property 50000

   Annual Depreciation = 50,000 / 27.5 = $ 1818.18

COMMENTS

: 3
  1. Thank you for sharing valuable information. Nice post. I enjoyed reading this post. The whole blog is very nice found some good stuff and good information here Thanks..Also visit my page Rental House Accountant

    ReplyDelete
  2. Thank you for sharing valuable information. Nice post. I enjoyed reading this post. The whole blog is very nice found some good stuff and good information here Thanks..Also visit my page property accounting..

    ReplyDelete
In comment, you can give your feedback, reviews, ideas for improving content or ask question relating to written content.

$hide=home

Name

access,2,account,87,accountant,93,Accounting,681,accounting definitions,99,accounting ebook,3,Accounting education,85,accounting procedure,2,accounting process outsourcing,2,Accounting Software,54,advance,3,advertising,6,africa,7,Amalgamation,6,amendments,16,announcements,62,Annuity,2,assets,52,audit,46,auditing,41,Australia,2,B.Com.,22,balance sheet,84,bank,111,Bank reconciliation,12,banking,33,basic accounting,110,BBA,1,benefits,13,best,50,bill,12,black money,3,blog,12,bloggers,7,book keeping,4,bookkeeping,2,Branch Accounting - full tutorial,8,budget,35,Budget variance,13,business,65,businessman,9,CA,30,calculator,4,canada,3,capital,72,capital budgeting,27,career,20,cash,40,cash book,8,cash flow statement,11,Chiense,1,children,13,china,6,class,3,coaching,2,coins,2,college,6,commerce,10,commerce students,7,company,36,computer,9,computer accounting,1,conference,4,Contact vinod kumar,1,Control Your Spending,27,corporate accounting,69,cost,160,cost accounting,195,cost center,8,cost centre,1,CPA,2,credit,18,credit card,11,cs,10,currency,35,data,11,Debit and credit,17,debit cards,1,debt,62,debtor,21,degree,6,depletion,2,depreciation,38,Diwali Messages,12,documents,4,dollar,5,domain,3,Downloads,3,Dubai,1,e-accounting,17,earning,17,education,247,Education Loans,6,email,15,employee,4,EPF,2,ERP,7,euromoney,1,examination,7,excel,17,excise duty,6,expenses,65,facebook,7,factor of loan,1,fans,2,feature,32,fifo,5,FII,4,fiji,1,finacle,1,finance,823,Finance Journal Entries,4,Financial,134,financial accounting,144,Financial Statements,1,fire insurance,3,flickr,2,flow,4,forensic,4,forex,21,formula,8,france,1,fraud,6,free,2,fun,34,function,1,fund,48,GAAP,36,GDP,1,gdr,5,germany,1,gold,7,goodwill,4,goodwill accounting,3,google,34,google apps,3,google apps,1,google base,1,google buzz,1,google calendar,1,Google docs,38,google finance,3,google fusion tables,1,google talk,5,govt.,5,GST,33,guide,85,health,6,Hindi,2,Hindi Language,3,history,3,holding company,3,How to treat FBT in Tally 9,1,HRA,3,ICAI,11,ICAWI,3,ICICI Bank,1,IFRS,10,income,17,income statement,17,Income Tax,7,India,57,indian railway,1,Indonesia,1,inflation,4,inflation accounting,3,infographics,8,information,7,inspiration,176,insurance,14,insurance accounting,2,Intangible,3,interest,26,international,7,Internet,41,Introduction of Tally 9,1,inventory,41,investment,135,investment in Shares,6,invoice,3,IT,1,Japan,1,Job costing,4,journal entries,139,Journal Entries eBook Help,4,Kalculate,1,keyboard,3,kuwait,2,laptop,2,law,4,LBT,1,learning,36,lease,5,lecture,11,ledger,15,leducation,1,Leverage Analysis,7,liabilities,16,lifo,3,linkedin,1,loan,74,logical point,1,loss,5,loss of profit,1,M.Com.,5,m.phil,2,malaysia,3,management accounting,129,manual accounting,4,manufacturing account,1,market,11,marketing,3,mastercard,2,material,13,MBA,14,MCA,1,media,4,migration,2,mobile,9,money,61,ms word,3,ms. excel,14,multi currency in tally 9,1,Multicurrency Accounting,3,mutual fund,30,national security,1,new and sacrifice ratio,1,new york times,1,new zealand,1,news,1,NGO,5,nonprofit-accounting,6,North Georgia Mountains,1,Notification,1,NPV,17,NSE,1,odbc,2,office,10,oman,1,online application,2,online accounting,11,Online Accounting Course,5,otcei,1,pakistan,3,parents,3,Partnership,1,pay pal,3,pdf,4,Personal Finance,6,pie chart,1,pie chart of income,2,pnb,5,podcast,1,ppf,1,presentation,10,price,7,privacy policy,2,prof. vinod kumar,13,profit,24,profit and loss account,12,project management,11,provision,13,purchase,9,puzzles,2,quickbooks,2,Quote,22,quotes,42,quotes of svtuition,1,rating agency,2,ratio analysis,34,RBI,7,readers,13,real estate,13,rectification of errors,11,remote control,2,reports,10,reserves,8,responsibility accounting,4,retirement,2,revenue,3,Revenue reserves,2,review,7,risk,11,rupees,9,salary,5,sale,12,saudi arabia,1,saving,19,sbi,9,scholarship,2,school,1,SEBI,13,security,30,service tax,23,share,20,share trading,15,Shares,16,shri lanka,3,singapore,2,sms,6,social accounting,7,society,5,solution,217,South Africa,1,stock,24,stock exchange,22,structure,6,student,39,students,70,study,21,subsidiary company,2,svtuition,14,swiss bank,2,tally,99,tally 9,8,Tally 7.2,8,Tally 9,42,Tally.ERP 9,59,tanzania,2,tax,94,Tax Accounting,30,TDS,15,teacher,62,teaching,112,technology,33,test,40,testimonial,15,testimonials,15,thailand,1,tips,60,trading,5,trading on equity,2,transaction,7,trend,12,trial balance,14,truthfulness,1,tuition,3,twitter,10,UAE,5,UGC - NET Commerce,13,UK,11,United Arab Emirates,1,university,9,usa,25,valuation,8,VAT,22,Video,35,Voucher and vouching,4,Wealth,8,wikipedia,25,working capital,29,youtube,14,
ltr
item
Accounting Education: How to Calculate the Depreciation on Rental Property
How to Calculate the Depreciation on Rental Property
Accounting Education
https://www.svtuition.org/2012/12/how-to-calculate-depreciation-on-rental.html
https://www.svtuition.org/
https://www.svtuition.org/
https://www.svtuition.org/2012/12/how-to-calculate-depreciation-on-rental.html
true
2410664366776677676
UTF-8
Loaded All Posts Not found any posts VIEW ALL Reply Cancel reply Delete By Home PAGES Contents View All RELATED CONTENTS FOR YOUR LEARNING Topic ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy