Discussion:Depreciation - Real Property

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Discussion Forum Index --> Tax Questions --> Depreciation - Real Property

Janie (talk|edits) said:

9 November 2005
A taxpayer (dentist) purchases a practice from another dentist. Included in the purchase price is the list of patients, and the medical building. Half of the building is owned by another dentist, who has been depreciating his share of the building for several years. Does my taxpayer begin at year one, or does he need to continue with the existing depreciation schedule?

The new owner begins at year one using his depreciable cost (total paid for the bldg minus portion attributable to the land). Janie 10:50, 9 Nov 2005 (CST)

Jsanchez (talk|edits) said:

17 November 2005
How was the original dentist able to sell his portion without the other owner. Was the original dentist part of partnership or was the building owned by two dentist as joints tenents? You should be able to depreciate the patients list.

MEJungman (talk|edits) said:

18 November 2005
The buyer can't simply assign the purchase price to the building and the land. When you buy a business for one lump sum, you must allocate that amount among the assets--that includes intangible assets like patient lists, and other items like the outstanding patient accounts held by the original dentist. (See Publication 544 for a full explanation.)

LJACPA (talk|edits) said:

18 November 2005
One thing that many buyers/sellers fail to do is to file Form 8594. This should be filed by both and the allocations must agree. The portion of the purchase price allocated to the building is the depreciable basis and depreciation begins with the date placed in service, which is probably the date of acquisition.

Sheldon (talk|edits) said:

28 November 2005
A dental practice and building probably also has quite a bit of section 1245 property that should also be valued, segregated and put on the Form 8594 that can accelerate depreciation for the new owner. Cost segregation can be a big help to the new owner.

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