 Now this one's a little bit easier to project into the future than if we were using a double declining method because we would expect the second month to be a full year straight line method which was 170,000 divided by 27.5 and we could see if I go to year two. Year two is at that 6181 so that's pretty easy to kind of project out into the future easier than you know the double declining methods to do that. There's no depreciation on the land. Now note that if you're if you're taking out a new client or something and they have rental property this schedule might not always be attached you know to the return. You're gonna need the schedule so that you can get the rental property on the books correctly. So if you have rental property I would highly recommend that if you have a new client what you would like to do is populate the stuff into the system as of the prior year so that you can then roll it over into the current year and make sure your your depreciation schedules are populated properly and match the prior year and so that they should roll over to the current year easily. Now obviously the depreciation will continue until all of the 170,000 has been consumed within depreciation. We've allocated it all out. We've got a tax benefit from it because we we got a deduction for the depreciation expense over the 27.5 years and after that point in time then if I go to like 2023 you could see part of it has been depreciated in the prior year. That means the basis in the property from a balance sheet standpoint is 170,000 minus the 5409 minus the 6181 right and that depreci and that's the depreciated part that has not yet been depreciated that represents current tax benefit into the future that we're going to be getting into the future either in the form of depreciation or if we dispose of the property then when we sell it that we're going to take the sales price minus this basically adjusted basis in the property including also including the land. So in other words we would like to have the adjust we would like to get the expense as soon as possible so we would like to write off the whole 200,000 this year oftentimes if we could but they won't let us we have to put it on the books as an asset run the depreciation schedules then we would like to have the depreciation life as short as possible so I can get the depreciation as early and I'd like to have an accelerated depreciation method if we could but in general they won't let us with the land we have to put it pretty long life 27.5 and then the straight line method now the 170,000 higher basis is usually good we want the high basis for for the because that represents tax benefit into the future the lower the basis goes it's good when we lower it because we're getting a tax benefit we're lower in the basis getting a tax benefit but the lower the basis is when I sell it that means that we're gonna have we're gonna have a gain more likely to have a gain gains are bad for taxes because it's income or we're likely to have less of a loss losses are actually good for taxes because we might be able to reduce you know other income you know with the loss so that's the general idea now the other thing is that's common is that we might have improvements if we have improvements in the property you would expect you you might say hey I would like to just extents them like as repairs like the common roof example where I'd say hey let me just expense the whole roof that I put in place right here but then if you replace the whole roof they're gonna say well no it's an improvement well if it's an improvement then I've got to put it on the books possibly as an asset acquisition enemy agent disposal and I you know if it's an improvement I might have to depreciate it over the the same in essence useful life as if the real estate was put in place at this point in time the twenty seven point five years now note that that some situations could come up if you're putting in stuff like a like a heating system or something like that and you're like well maybe it's if it's not permanently attached to the home or something like that maybe I can call it not an improvement and if I can't if I can't just call it a repair and depreciate it I would like to depreciate it over five or seven years as opposed to twenty seven point five years that would be more beneficial so you run into these kind of problems as well right I would like to record it as a repair so I can get the expense now if they won't let me record it as a repair do I have to depreciate it over twenty seven point five years straight line method or can I can I somehow get it categorized as five years seven year property so I can have an accelerated depreciation method at least or even better take a one seventy nine deduction or a special depreciation allowing me to take it you know sooner would be the idea the idea but if it's a standard improvement we'd say and usually the improvements are going to happen not in the same year that we purchased the home but let's say we had an improvement so improvements and again you probably want to be a lot more specific you would on your descriptions so you know exactly what the improvement was so that at a future time when you when you sell the home or something you can figure out your adjusted basis for the sales price which will typically be the house the land the improvements and you can back up those improvements because you can go and find you know the the documentation of the improvements that were put in place so we're going to say this is going to be going to schedule e as well this is going to be for improvements so I'm going to say it was eleven fifteen twenty two fifteen thousand and I'm going to use that maker's a twenty seven point five year straight line which is the same method as with the house so now if I pull back on over we've got that populating here if I go to my two thousand twenty two depreciation schedules we now have another category with the improvements so the improvements here calculating another sixty eight dollars you can see how how much the improvement is reduced because the fifteen thousand a fairly significant dollar amount if I got to expense it and the current year would be would be fifteen thousand dollars versus if I have to expense it over twenty seven point five years significantly less sixty eight dollars over twenty seven point five years which will still add up to the fifteen thousand but I have to wait a lot longer to do that versus if I was able to categorize it somewhere else or populate it in one seventy nine deduction or a special where I would get more of it up front in those cases or if I can populate it somewhere other than you know the twenty seven point five year property like a five year or seven year I would get an accelerated method possibly double declining or something like that and be able to depreciate it not over twenty seven point five years so you can see the incentives from a taxpayer perspective I would like to not have to capitalize it not put it on the books as an asset take the fifteen thousand as an expense repairs or something if I could or get a one seventy nine deduction or special which would basically have a similar effect or have a lower life and an accelerated depreciation double declining if I could or seven or five years and then and and rather than having a longer life with a straight line kind of method would be the general thought process but obviously the tax code is going to restrict us now also remember that we might have had a loan on the property right if I had a loan on the property and had points on the loan so if I go over here I would expect if I had the rental property that I would have a loan on it and you would expect for me to get a statement for the interest statement right so I would have mortgage interest not going to schedule a but rather being being an expense here so let's say we had interest mortgage interest and let's say it was it was you know thirteen thousand or something like that but we might also have points that we discussed a little bit in a prior presentation which are kind of we can think of them as basically the advanced advanced payment of interest so so we should get to deduct the interest then but the fact that it's advanced the iris doesn't like those those advanced payments they think you're taking advantage of taking the deduction sooner rather than later so we might have to put the points on the books which again really only happens when you first buy the property or something or take out the loan so you might have to depreciate basically points and the general idea with the points would be that uh let's take let's go to the depreciation schedule if that was to happen you're gonna say all right gotta depreciate the points so let's add another one and then points you'd probably want to be you would want to be quite specific on the loan and possibly the last four digits of the loan number so you know which points you're talking about where it's tied to so if you sell the property or refinance you can properly deal with the points at that point in time