One question you might have right now is how long does a depreciation schedule last. For new real estate investors, it’s a bit challenging to guess how many years should be put in your depreciation schedule. Since assets don’t have similar shelf lives, they get confused about recording. If you are not that familiar with depreciation reports, it will take you days or even weeks to get the gist of it.
But then again, knowing the essential small details will help you understand or read an organized schedule provided by a depreciation report specialist through Tax Depreciation Schedule Services. Let’s take a look at some information that can help you determine how long a depreciation schedule should last.
Shelf Life of Your Assets
The shelf life of your assets affects the length of your depreciation schedule. So, for example, properties usually last for 40 years. The Australian Taxation Office already determines this period. 40 years is the maximum shelf life of a building, which may also be reduced depending on the overall assessment of your asset. So, if the estimate for your building is 40 years, your depreciation schedule can last up to 40 years. For a Depreciation Schedule For Rental Property, the shelf life of asset lasts up to 40 years.
What if you have more than one asset?
If you have more than one asset, you don’t have to create separate schedules for them. In fact, you can include all your assets in one depreciation schedule. Most real estate investors and companies do this. When all assets are combined in one depreciation schedule, the highest shelf life of one asset is used as the basis of the period of a depreciation schedule. It will not make sense to include all assets and have, let’s say, a building that has 40 years of life and not use your depreciation schedule until the remaining life-years are consumed.
How do you know if your depreciation schedule is still valid?
Perhaps you are thinking whether the depreciation schedule you are using is still valid or not. If you have been referring to it for years to check your depreciation expenses, some of the data may be outdated. But, don’t worry. Depreciation schedules are meant to last long since the assets in the real estate industry are live more than other personal properties.
So, how would you know if you are using the right depreciation schedule? First, you have to check all the assets included in the schedule. Do they still have remaining years to live? If yes, then you are on the right report. The use of your depreciation schedule will depend on the shelf life of your properties. The longer they are usable, the longer you can use your schedule.
Next, check if you are using your updated depreciation schedule. If your assets on the report have 5 years of life and you are using the schedule for three years, the calculations should be updated until the 3rd year. If not, then you might need to update it first before you can use it again. This is to make sure you are not missing any depreciation expense to write off.
If you need more help with your depreciation schedule, you might want to ask for a professional to assist you through Depreciation Report Services. Or, call us at 1300 313 524 to get immediate help.