What type of property can be depreciated over 27.5 years?

The correct answer is residential property, which can be depreciated over 27.5 years according to the IRS guidelines for tax purposes. This period is established for the purpose of calculating depreciation on residential rental properties, allowing property owners to recover the cost of the property over time through annual depreciation deductions on their tax returns.

Residential property is defined as property that is primarily used for residential purposes, such as single-family homes or apartment buildings. The depreciation period reflects the expected useful life of the property in a rental context.

In contrast, nonresidential and commercial properties generally have longer depreciation schedules, typically over 39 years. Investment land, on the other hand, is not depreciable because land does not have a finite useful life. This distinction highlights the specific tax treatment of residential rental properties in the context of real estate investment.