Who Can Claim Depreciation

To claim depreciation, you usually must be the owner of the property and you must use the property in your trade or business or for producing income.

Example 1. You made a down payment on rental property and assumed the previous owner's mortgage. You own the property and you can depreciate it.

Example 2. This year you bought a new van that you will use only for your courier business. You will be making payments on the van over the next 5 years. You own the van and you can depreciate it.

Rented property. Generally, if you pay rent on property, you cannot depreciate that property. Usually, only the owner can depreciate it. For more information on rented property, see Leased property under What Cannot Be Depreciated, later. If you make permanent improvements to business property you rent, you can depreciate those improvements.

If you rent property to another person, you can depreciate that property.

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