Housing Assistance: An Inventory of Fiscal Year 2010 Programs, Tax Expenditures, and Other Activities
U.S. Government Accountability Office
Accelerated depreciation on rental housing
| Administering Agency/Entity |
Internal Revenue Service |
| Short Description |
Allows owners of rental housing to deduct depreciation expenses at a more accelerated rate (over 27.5 years) than normally permitted (over 40 years). The amount of depreciation that a taxpayer can deduct for both property improvements and the cost of rental property depends on the taxpayer’s basis in the property, among other factors. A taxpayer’s basis in a rental property is generally the cost of the property when it was acquired, excluding the cost of land. If the taxpayer is subject to the alternative minimum tax and the rental housing is placed in service after 1998, depreciation also is determined using the 27.5-year period. If the taxpayer is subject to the alternative minimum tax and the rental housing is placed in service after 1986 and before 1999, then depreciation reverts to a 40-year write-off period. |
| Primary Purpose |
Assistance for rental property owners |
| Type of Housing Supported |
Rental housing |
| Type of Assistance |
Deferral of tax |
| Estimated Revenue Loss1 |
-$1,490,000,000; tax expenditure revenue loss estimates are generally reported in the President’s budget on a cash basis. When incoming tax receipts from past deferrals are greater than deferred receipts from new activity, the cash-basis tax expenditure estimate can be negative. For certain tax expenditures that take the form of deferrals of tax liability, the President’s budget also presents estimates made on a present value basis. The President’s budget for fiscal year 2012 reported that the estimated present value of revenue losses for activities undertaken in calendar year 2010 for this tax expenditure would be $6,570,000,000. |
(Return to main page)
(Return to program listing)