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I am trying to gain some level of understanding on how to come up with a "useful life" for a commercial property, so that when I apply depreciation to my annual cash projections, I can come up with a reasonable assumption for what taxes will be on the property.
Is there a generally accepted accounting method for doing this? Does a useful life depend on the type of property, age, condition, etc? I have seen anything from 25-40 years used by investors I have dealt with in the past, but if there is an exact method to doing this, I would like to know.
I am trying to gain some level of understanding on how to come up with a "useful life" for a commercial property, so that when I apply depreciation to my annual cash projections, I can come up with a reasonable assumption for what taxes will be on the property.
Is there a generally accepted accounting method for doing this? Does a useful life depend on the type of property, age, condition, etc? I have seen anything from 25-40 years used by investors I have dealt with in the past, but if there is an exact method to doing this, I would like to know.
Many thanks
Not sure if I am following your question but the depreciation is staight line and the amount of years is specified by the IRS.