How to calculate depreciation for business of the home. The information is below:
Coles purchased their present residence in April 2010, they devoted 450 of the 3,000 square feet of living space to an office for David. The property cost $440,000 ($40,000 of which is attributable to the land) and has since appreciated in value. Expenses relating to the residence in 2013 (except for mortgage interest and property taxes; see below) are as follows:
Insurance ……………………………………………………… $2,600
Repairs and maintenance ……………………………………… 900
Utilities ………………………………………………………… 4,700
Painting office area; area rugs and plants (in the office) ………. 1,800
• In terms of depreciation, the Coles use the MACRS percentage tables applicable to 39-year non residential real property. As to depreciable property (e.g., office furniture), David tries to avoid capitalization and uses whatever method provides the fastest write-off for tax purposes.