Over how many years is a commercial property depreciated?

Commercial properties are typically depreciated over a period of 39 years. This depreciation is based on the Modified Accelerated Cost Recovery System (MACRS), which the IRS mandates for real property. Under this system, non-residential real estate, including commercial properties, is assigned a useful life of 39 years for the purposes of depreciation calculations. This means that the value of the commercial property is spread evenly over those 39 years for tax deduction purposes.

The longer depreciation period reflects the expected useful life of commercial buildings, which tend to have a longer lifespan compared to residential properties, which are depreciated over 27.5 years. Understanding this distinction is crucial for investment considerations, tax planning, and assessing property values over time.