Residential rental real estate placed in service on July 17,2013,is depreciated over

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Residential rental real estate is classified as nonresidential real property, which has a recovery period of 39 years under the straight-line method and mid-month convention. However, since the property was placed in service on July 17, it is subject to the mid-month convention, which means that it is treated as if it were placed in service in the middle of July. Therefore, the first year depreciation deduction will be half of the annual amount. The 27.5-year recovery period is used for residential rental properties, but it is not applicable in this case because the property was placed in service after May 12, 1993. The 150%-declining-balance method is not available for nonresidential real property.

Residential Rental Real Estate Placed in Service on July 17,2013,is