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We prepare most type of tax returns:


S Corporation.

C Corporation.




Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Video Testimonials

Click here to watch some of our clients in their video testimonials!

Client Testimonials

I had a 1099-C for about $135,000. My husband didn't have any withholding on Social Security. His employer couldn't withhold due to incompetence. I felt utter dread wash over me. Memories of owing the IRS before were constantly on my mind. I called a local CPA. Besides being clueless, he wanted to charge me for every question I had about insolvency. I looked on line and found little hope of the countless stories of permanently disabled people like myself getting their student loans forgiven only to be asked to pay taxes on it as if it were income.
Somewhere, somehow, I find an article by Gary Bode. I bookmarked it for when it's time to do the actual taxes. With his excellent help in how to do all of this out of a virtual office I get my part of the work done. My questions got answered, for free. I give a retainer, do what I said I did and wait. I hear from Gary. I go into shock! How can this be? Not only do I not owe on the 135,000....Gary itemizes and after paying what was almost nothing in taxes we get $950.00 back! No more hubby doing the taxes online! I will use Gary Bode as long as he will agree to work with me!
It was so easy, no worries, but professional and top notch. I know I have thanked you Gary but I am so grateful. Thank you ever so much again!

Carla Bray

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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CPA explains Residential Rental Property Depreciation | IRS Schedule E and Form 8825

residential rental property CPA explains depreciation

Most tax software handles residential rental property depreciation. But if you get uncomfortable preparing Schedule E or Form 8825, consider calling us at (910) 399-2705.

I’m a rental property CPA because some of my extended family owns residential rental property, so I stay on top of Schedule E and Form 8825 issues. We’ve got a virtual office to offer you service wherever you live.

What is Residential Property Depreciation?

Depreciation means you deduct the cost of your rental property over time on Schedule E or Form 8825. You can’t write it all off in the year of purchase. For the rental unit itself, the time frame is 27.5 years. But be aware that the residential rental property depreciation doesn’t include the land. Here’s an example:

  • On July 1st, 2013 you buy a residential rental property for $200,000.
  • The land is worth $50,000. It’s best to have some basis for what the land is worth. Depreciating the land would be trouble if you’re ever audited.
  • So, the house itself is worth $150,000 (200,000 – 50,000).
  • Depreciation is $5,456 per year (150,000 / 27.5).
  • You can deduct $2,727 (5,456 / 2) of rental property depreciation on your 2013 Schedule E or Form 8825.

Your Residential Rental Property usually has multiple assets being depreciated

Let’s say you buy a new stove for the rental above on October 1st, 2013 for $300. The IRS allows you to write the $300 over five years. So you’d deduct $15 of depreciation for the stove on your 2013 Schedule E or Form 8825. ($300 / 5 = $60 per year x ¼ year = $15).

Residential Rental Property can come back to bite you

The IRS makes you recapture the depreciation when you sell the rental property.

  • You sell the above rental property for $190,000 on July 1st, 2015, including the stove.
  • It looks like you lost $10,000 (200,000 – 190,000).
  • But you have to recapture the depreciation.
  • That’s $10,909 for the rental property house. ($5,456 x 2 years).
  • And $105 of depreciation for the stove.
  • You have a $1,104 gain for the sale of your residential rental property (200,000 – $190,000 +11,104 = $1,104).

Self-preparing Form Schedule E or Form 8825?

Most tax software handles simple to moderate residential rental property tax issues well. Don’t have the national chains prepare Schedule E or Form 8825 – do it yourself with tax software or give us a call at (910) 399-2705.

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