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Comment by criddell | Hacker News Reader

A developer friend told me that one of his biggest problems are accounting related. I probably have this wrong, but I think he was saying that if he has commercial tenants, everything can be depreciated over 20 years. If the building is residential, then the depreciation schedule is 30 years. When you have a building that contains a mix of the two, it gets complicated.

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27.5 residential and 39 commercial, but the problem remains. It isn't that big of a deal. Creating different depreciation schedules for different items on a property should be done no matter what (fences are 5 years, for example).

I’m going to ask for your source. Not because I doubt you, but because I wonder what other interesting depreciations exist. I never knew a fence had a 5 year tax lifetime.

Have you ever seen a fence with a post about an inch from a building wall? That is great to reduce decay, but it also makes it a separate structure and depreciable as a fence instead of an extension of the building. Or so they say. I find it hard to imagine it would actually matter to an auditor. And yes, best source is the IRS. Appliances for example have their own depreciation schedule, etc. What I do is on any larger purchase just quick search in the depreciation tables to help make the decision on how/whether to do it. But many items are now 100% depreciable first year with the new tax codes, and I am not up to snuff on that at all.

It should be on the IRS website. They determine the "useful life" of various capital goods and the set the depreciation schedule. Another example I believe is that cars have a 7 year life for tax purposes.

That's an interesting point. I wonder if tax-incentivizing mixed use development by allowing a short depreciation period could create the same desired result as mandating it.

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