Depreciation on residential rental property bought and sold same year

[jgcpa]

Is there depreciation on rental property bought and sold in same year? Proseries does calculate the depreciation. UltraTax does not. Drake creates an error message for depreciation in same year. Pub 527 says no depreciation if property bought and sold in same year. Pub 527 is titled Residential rental property. Please clarify- is there depreciation ? ( please disregard software, and reply based on code, or regulations)

[sjrcpa]

Does Pub 527 say property or personal property?

[jgcpa]

Excepted property. Even if the property
meets all the requirements listed earlier under
What Rental Property Can Be Depreciated, you
can’t depreciate the following property.
• Property placed in service and disposed of
(or taken out of business use) in the same
year.

The Publication says Property ( not personal Property)

•

[sjrcpa]

Check Section 168 and the Regs thereunder. It's probably there. I just took a look at 168. I forgot how long it is. Didn't see it but that doesn't mean it's not there.

[TaxGuyBill · Accepted solution]

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@jgcpa wrote:

Excepted property. Even if the property
meets all the requirements listed earlier under
What Rental Property Can Be Depreciated, you
can’t depreciate the following property.
• Property placed in service and disposed of
(or taken out of business use) in the same
year.

The Publication says Property ( not personal Property)

•

---

That is what the Publication says, but I've never been able to find any basis of that applying to real estate.

The only place I've seen that is in Regulation §1.168(d)-1, and that Regulation is about Half-Year and Mid-Quarter conventions, neither of which apply to real estate.

https://www.law.cornell.edu/cfr/text/26/1.168(d)-1

[jgcpa]

Me too. I only saw the regs mention Half year and Mid quarter convention. Thank you all for your comments.