How many years can nonresidential property improvements be depreciated?

Nonresidential property improvements can be depreciated over a period of 39 years. This is in accordance with the Modified Accelerated Cost Recovery System (MACRS), which is the method used to calculate depreciation for property in the United States.

Nonresidential properties are classified separately from residential properties, which are typically depreciated over a shorter time frame of 27.5 years. The 39-year depreciation period for nonresidential properties reflects the longer useful life ascribed to such properties, which can include office buildings, retail spaces, and other business-related real estate.

Understanding the correct depreciation period is crucial for investment planning, tax calculations, and overall financial strategy in real estate, as it affects the annual tax deductions a property owner can claim. This knowledge is essential for real estate professionals who assist clients in making informed decisions regarding property investments and management.