H. Residential Rental Property
H.1. Planning and Examination Guidance
(1) Exhibit A is a matrix recommending the categorization and general depreciation system recovery period of various assets commonly associated with residential rental property. (For recovery periods under the § 168(g) alternative depreciation system, see § 168(g)(3) and Rev. Proc. 87-56, 1987-2 C.B. 674). If the taxpayer’s tax return position for these assets is consistent with the recommendations in Exhibit A, examiners should not make adjustments to categorization and recovery periods. If the taxpayer reports assets differently, then adjustments should be considered. See also the Cost Segregation Audit Techniques Guide. If you have any questions, please contact the Deductible and Capital Expenditures (DCE) Practice Network.
(2) This matrix, which is part of the Cost Segregation Audit Techniques Guide, is intended to provide direction to effectively utilize resources in the classification and examination of property used in the operation of residential rental property (RRP). RRP per § 168(e)(2)(A) is a building with 80% or more of the gross rental income from such building is rental income derived from dwelling units. A dwelling unit is defined as a house or apartment used to provide living accommodations in a building structure. General fact patterns specific to these properties have been considered in the classification of these assets and may not be applicable to other properties. Similarly, asset classification guidance issued for other industries is based on the general fact pattern for that industry and may not be applicable to RRP. For example, for asset classification of restaurant assets located within an apartment building, refer to the industry directive for restaurants. For examination techniques and historical background related to this issue, refer to the Cost Segregation Audit Techniques Guide. Per § 168(c), RRP is recovered over 27.5 years. A rental office/clubhouse building is non-residential real property (NRRP) (as defined in IRC § 168(e)(2)(B)), and is recovered over 39 years under § IRC 168(c). Asset Class 57.0 - Distributive Trades and Services applies to most of the § 1245 property used with RRP, which is recovered over 5 years. Property classified in the Asset Class 00.3 - Land Improvements are recovered over 15 years.
(3) Asset Classification for Cost Segregation of Residential Rental Property - Exhibit A
| ASSET | RESIDENTIAL RENTAL DESCRIPTION | PROPERTY TYPE | RECOVERY PERIOD |
|---|---|---|---|
| Awnings & Canopies | Readily removable overhang or covering, often of canvas or plastic, used to provide shade or cover over a window, or a door. Does not include canopies that are attached permanently to buildings and are an integral part of a building’s structural shell. See also Porches, Porte-Cochere, and Portico categories. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Balcony | A platform enclosed by a wall or balustrade typically on the outside of a building with access by occupants from an upper-floor door or window. | § 1250 | RRP – 27.5 Years |
| Balcony – False | Exterior ornamentation that has no more than an incidental relationship to the operation of a residence or apartment building. For example, a false balcony does not provide for outdoor use by occupants or for protecting occupants from falling. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Bollards and Guardrails – Building | Bollards (metal or concrete posts) and Guardrails mounted in a concrete foundation or sturdily affixed to the ground so as to create a protective barrier around areas of the building vulnerable to vehicle traffic such as doors, door frames, HVAC components, building corners, etc. Bollards and Guardrails can be located inside or outside of the building, are permanently attached, and are intended to be permanent. The purpose of the bollard or guardrail is to protect the building occupants, the building, and/or the building structural components. | § 1250 | RRP – 27.5 Years NRRP – 39 Years |
| Bollards and Guardrails - Site | Bollards (metal or concrete posts) and Guardrails mounted in the ground or concrete to protect machinery and equipment from vehicular damage, or to prevent vehicles from trespassing onto specific areas. Placement to protect land improvements and non-building items such as signs, sign poles, flagpoles, trees, etc. Bollards and guardrails are permanently attached and intended to be permanent. The purpose of the bollards or guardrails is to protect land improvements. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Cabinetry - Kitchen | Kitchen cabinetry, counters, sinks. See also Kitchen Components and Finish Carpentry. | § 1250 | RRP – 27.5 Years |
| Cabinetry - Restroom | Restroom cabinetry, counters, sinks. See also Restroom Components and Finish Carpentry. | § 1250 | RRP – 27.5 Years |
| Cabinetry – Rental Office/Clubhouse | Rental Office/Clubhouse cabinetry, counters, sinks in kitchen or restrooms. See also Finish Carpentry. | § 1250 | NRRP – 39 Years |
| Ceilings | Includes all interior ceilings in a residence regardless of finish or décor; e.g. drywall or plaster ceilings, acoustic ceilings, suspended ceilings (including hangers, frames, grids and tiles or panels), decorative metal or tin finishes, plastic panels, decorative panels, etc. | § 1250 | RRP – 27.5 Years |
| Ceiling Fans | Ceiling fan typically with attached lights. Lighting typically is the primary light source (artificial illumination) in the room. | § 1250 | RRP – 27.5 Years |
| Common Areas – Exterior | Inherently permanent, outdoor, swimming pools/spas and associated equipment, various athletic courts (tennis, basketball, pickleball), and playground equipment that are built on land. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Common Areas – Interior | Includes swimming pools/spas and associated equipment, and various athletic courts (e.g., tennis, basketball, pickleball) that are contained within, on, or attached to a residential building. | § 1250 | RRP – 27.5 Years |
| Community Mailboxes and Structure - Exterior | Includes a freestanding structure providing a roof over the community mailboxes. Does not include mailboxes owned by the U.S. Postal Service. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Community Mailboxes (In Building) - Interior | Interior built-in mailboxes for tenants of a building, including mailboxes within the office/clubhouse. Intended to remain in place. Does not include mailboxes owned by the U.S. Postal Service. | § 1250 | RRP – 27.5 Years NRRP – 39 Years |
| Concrete Footings and Foundations – Building | Foundations and footings necessary for the construction of the building. Includes excavation and backfill for building footings and foundations, but does not include site grading costs. See also Grading - Excavation & Fine Grading for Buildings. Note: Excavation and backfill for equipment foundations where contained within the footprint of the building are included in this § 1250 category. Includes formwork, reinforcement, concrete block, and pre-cast or cast-in-place work. | § 1250 | RRP – 27.5 Years |
| Concrete Footings and Foundations – Land Improvements | Foundations and footings for signs, light poles, and other land improvements (except buildings). Includes excavation, backfill, formwork, reinforcement, concrete block, and pre-cast or cast-in-place work, but does not include site grading costs. See also Grading - Excavation & Fine Grading for Depreciable Site Improvements. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Data Cable and Wiring | All components of a telephone, internet, cable TV, satellite TV, and/or Wi-Fi systems used in the operation of a specific piece of equipment that is not a structural component of the building. Can be utilized by a variety of phones, cell phones, televisions, tablets, computers, etc. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Decks | A platform typically made of lumber/composite attached to a residence or other building and often containing stairs or ramps from building floor level to ground level. | § 1250 | RRP – 27.5 Years |
| Decks/Gazebos (Freestanding) | Inherently permanent decks and gazebos not attached to buildings. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Doors | Interior and exterior doors, regardless of decoration and location, including but not limited to, double opening doors, French doors, sliding doors, overhead doors, revolving doors, entrance security gates, roll-up or sliding wire mesh or steel grills and gates, and door hardware (such as doorknobs, closers, kick plates, hinges, locks, automatic openers, etc.). Includes computerized door locks, encoders, computers, and other associated hardware of the computerized lock system. Includes garage door openers. | § 1250 | RRP – 27.5 Years |
| Electrical Branch Circuits - Appliances | Electrical connections which are necessary to and used directly with a specific appliance, such as dedicated electrical outlets, wiring, conduit, and circuit breakers by which appliances are connected to the building’s electrical distribution system (EDS). For example, 220-volt wiring and outlets dedicated to electric clothes dryers and electric ranges, or 110 volt outlets dedicated to clothes washers, dishwashers, refrigerators, or built-in microwave ovens. Does not include electrical outlets of general applicability and accessibility. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Electrical Branch Circuits - Building | Includes all components of a residential building’s branch circuits, whether located inside or outside of the building, used in the operation or maintenance of the building or to provide general building services (such as lighting, heating, ventilation, air conditioning, etc.). Includes electrical outlets of general applicability and accessibility, and electrical wiring. Also includes GFI outlets in bathrooms, kitchens, etc. Branch circuits are the electrical connections between a distribution or subpanel and the end-use equipment. This includes wire and conduit, junction boxes, wall switches, and outlets. | § 1250 | RRP – 27.5 Years |
| Electrical Lighting - Exterior – Building | Exterior lighting whether decorative or not to the extent that the lighting is used for the convenience and safety of the tenants or otherwise relates to the operation or maintenance of the building. This category includes building mounted lighting to illuminate walkways, building entrances, parking, etc. | § 1250 | RRP – 27.5 Years |
| Electrical Lighting - Exterior - Decorative/Special Fixture | Lighting that highlights only the landscaping or building exterior (but not parking areas, walkways, or building entrances) and does not relate to the operation or maintenance of the building. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Electrical Lighting - Interior - Building | Includes lighting such as ceiling-mounted, recessed, and lay-in lighting fixtures, and night lighting that provides general lighting for a room or area of the building. Includes decorative lighting fixtures that provide general illumination in the building or along building walkways. For emergency and exit lighting, see Fire Protection and Alarm Systems. | § 1250 | RRP – 27.5 Years |
| Electrical Lighting – Interior – Decorative/Special Fixture | Light fixtures, such as neon, track lighting, or grow lights which are decorative in nature and do not provide general illumination for a room or area of the building. If the decorative lighting were turned off, the other sources of lighting would provide sufficient light for operation or maintenance of the building. If the decorative lighting is the primary source of lighting, then it is §§ 1250 property (RRP – 27.5 Years). See also Electrical Lighting – Interior – Building. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Electrical Lighting – Site Lighting | Pole mounted or freestanding outdoor lighting system to illuminate sidewalks, parking, or recreation areas. See also Poles & Pylons, Signs – Exterior, and Lighting – Site. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Electrical - Primary and Secondary EDS – Appliances | Includes the § 1245 power portion of the costs of the primary and secondary electrical distribution system (EDS), serving for example electric clothes dryers, electric ranges, clothes washers, dishwashers, refrigerators, or built-in microwave ovens. The EDS should be allocated by design load of the end-use appliances as described in the EDS section of the Cost Segregation Audit Techniques Guide. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Electrical - Primary and Secondary EDS – Building | Includes the § 1250 building power portion of the costs of the primary and secondary electrical distribution system (EDS) used in the operation or maintenance of the building or to provide general building services such as electrical outlets of general applicability and accessibility, lighting, heating, ventilation, air conditioning, etc. Primary EDS includes the taxpayer owned and operated electrical equipment that receives the electrical service from the outside source (power utility company) to the main distribution panels (MDPs) and transformers or “switchgear” on large building projects. May include feeder circuits, power service entrance equipment, transformers, and conduit. Secondary EDS includes the electrical equipment that brings the electrical power from the MDP to the local distribution panels that feed the branch circuits. For small buildings, the power from the electrical utility generally feeds directly to a main electrical panel instead of an MDP or transformer, thus eliminating the primary and secondary designation. In any case, the EDS should be allocated in the same manner, by design load of the end-use equipment as described in the EDS section of the Cost Segregation Audit Techniques Guide. Does not include electrical hook up to appliances qualifying as § 1245 property (washer/dryer, refrigerator, range/ovens). See also Electrical Branch Circuits – Appliances. | § 1250 | RRP – 27.5 Years |
| Electrical - Site | Electrical service to outdoor lighting systems for sidewalks, parking or recreation areas, sump pumps, exterior power receptacles not attached to the building, or non-building land improvement equipment. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Elevators and Escalators | Elevators and escalators, including all components thereof (e.g., handrails), which are permanently affixed to the building and designed to remain in place. Elevators and escalators relate to the operation or maintenance of the building and are structural components. | § 1250 | RRP – 27.5 Years |
| Energy Management Systems | Energy management systems control all energy-using systems in a building, automatically checking occupancy schedules, reading temperatures, and re-circuiting light levels, causing all heating, cooling, and lighting equipment to operate so as to minimize energy costs. Includes, for example, detection devices such as smoke, motion and infrared devices, photocells, foil and contact switches, pressure switches, proximity alarms, sensors, alarm transmitting controls, data gathering panels, demand controllers, thermostats, computer controls, outside air economizers, occupancy sensors, electronic ballasts, and all related wiring and conduit. May also provide for fire and burglary protection. | § 1250 | RRP – 27.5 Years |
| Facades – Mansard Roof | A gambrel style hip roof characterized by two slopes on each of its sides. Lower slope is steeper than the upper and can be punctuated with dormers. See also Roofs. | § 1250 | RRP – 27.5 Years |
| Fencing, Gates, Retaining Walls, Fountains, and Other Land Improvements | Depreciable improvements directly to or added to land, whether such improvements are § 1245 or § 1250 property. Examples include fences; gates; canals; waterways; drainage facilities; sewers (not including municipal sewers in Class 51); retaining walls; waterfalls and fountains; holding, settling, or detention ponds; and irrigation systems. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Finish Carpentry | Built-in bookshelves, shelving and rods in bedroom, hallway, and linen closets, pantries, etc. See also Cabinetry – Kitchen, Cabinetry – Restroom, Cabinetry – Rental Office/Clubhouse, Kitchen Components, and Millwork – Building or Structural. | § 1250 | RRP – 27.5 Years |
| Fireplaces and Woodstoves | Includes built-in wood-burning or gas fireplaces, flues, chimneys, inserts, blowers, mantels, and other components of fireplaces. Includes built-in faux fireplaces. | § 1250 | RRP – 27.5 Years |
| Fire Alarm and CO2 Detectors | Battery powered or hard-wired fire alarms and CO2 detectors, generally mounted to ceilings or walls by screws. | § 1250 | RRP – 27.5 Years |
| Fire Protection and Alarm Systems | Includes sensing devices, computer controls, sprinkler heads, piping or plumbing, pumps, visual and audible alarms, alarm control panels, heat and smoke detection devices, fire escapes, fire doors, all emergency exit lighting and signage, and wall mounted fire extinguishers and cabinets necessary for the protection of the building. | § 1250 | RRP – 27.5 Years |
| Fire Protection Equipment | Includes special fire detection or suppression systems directly associated with a piece of equipment. For example, a kitchen fire extinguisher. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Fire Protection Piping Systems - Building | Fire protection piping systems are the mechanical piping systems that provide water for automatic sprinkler systems and to extinguish and fight fires occurring at the building and are designed for the protection of the building and its occupants. Building fire protection piping systems include all of the components of the fire protection piping system, both inside and outside of the building, serving the operation or maintenance of the building or necessary to provide general building services. Building fire protection piping systems can include wet, dry, deluge, and pre-action fire protection piping systems. The building fire protection piping system includes all of the components required for a properly operating system such as fire protection piping, fittings, valves, hangers and supports, sprinkler heads, fire water pumps, fire water tanks, fire water mains, flow switches, hydrants, post-indicator valves, fire hoses, and fire hose stations. | § 1250 | RRP – 27.5 Years |
| Floor Coverings - Permanent | Includes floor covering that is affixed with permanent adhesive or nailed or screwed in place. Examples include ceramic or quarry tile, marble, paving brick, and other coverings cemented, mudded, or grouted to the floor; epoxy or sealers; and wood flooring. | § 1250 | RRP – 27.5 Years |
| Floor Coverings – Readily Removable | Floor covering that is installed by means of strippable adhesives and can be 1) readily removed and remain in substantially the same condition after removal as before, or 2) moved and reused, stored, or sold in its entirety. All vinyl composition tile (VCT), sheet vinyl, and carpeting will be treated as not permanently attached and not intended to be permanent. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Floors - Concrete | Includes concrete slabs and other floor systems. Floors include special treatments applied to, or otherwise made a permanent part of, the floor. | § 1250 | RRP – 27.5 Years |
| Floor Drains | Floor drains in garages, basements, and community laundry rooms for water/condensate drainage, and to protect the building from damage to broken water pipes. | § 1250 | RRP – 27.5 Years |
| Furnishings – Rental Office Furniture | Includes furniture and fixtures that are not structural components of the building. Includes desk, chair, credenza, file cabinet, table, or other furniture such as workstations. Also includes telephone equipment, fax machines, and other communications equipment. Does not include communications equipment included in other asset classes in Rev. Proc. 87-56. In new construction, these are typically acquired under separate contract and does not get an allocation of construction indirect costs. | § 1245 | 00.11 Office Furniture, Fixtures, and Equipment – 7 Years |
| Furnishings – Rental Office System Furniture and Office Cubicles | Includes small re-usable partitions that are frequently relocated and re-used. In new construction, these are typically acquired under separate contract and does not get an allocation of construction indirect costs. | § 1245 | 00.11 Office Furniture, Fixtures, and Equipment – 7 Years |
| Furnishings - Pool, Clubhouse, Exercise Room | Includes furniture and exercise equipment including chairs, chase lounges, exercise equipment, benches, freestanding lockers, built-in lockers, etc. In new construction, typically acquired separate from the construction contract and does not get an allocation of construction direct or indirect costs. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Furnishings - Residential | Includes all furniture and furnishings typically found in a furnished house, condo, apartment, etc. For example, beds, chairs, sofas, and tables. In new construction, typically acquired separate from the construction contract and does not get an allocation of construction direct or indirect costs. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Generator - Building | Backup power generator typically fueled by natural gas or propane. Used to provide power to a residence in case of electrical power outage (i.e., Generac). In the case of mid- to high-rise residential buildings, large apartments and condominiums projects the generators typically provide power to the emergency egress lighting, illuminated exit signs, wall pack spotlight units to provide safe egress for the building occupants and for the ingress/egress of emergency personnel, and other life-safety related building systems. In both cases the generator is for the operation and maintenance of the building. | § 1250 | RRP – 27.5 Years |
| Grading - Excavation & Fine Grading for Buildings | Excavation and fine grading directly associated with construction of specific building foundation elements (e.g., footings & slabs, etc.) that are necessary for the proper setting of the building and are part of the building costs. See also Concrete Footings and Foundations - Building. | § 1250 | RRP – 27.5 Years |
| Grading - Excavation & Fine Grading for Depreciable Site Improvements | Excavation and fine grading directly associated with the construction of specific site improvements (e.g., roads, sidewalks, parking lots, etc.) that is included as part of the contract costs to construct the specific site improvement. Includes finish grading (base course & fine grading) for sidewalks, parking areas, roadways, and other depreciable land improvements. See also Land Improvements and Roadways. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Grading - Land Preparation, Site Grading & Site Excavation | Non-depreciable land preparation costs, in general, include the one-time cost of demolition, clearing and grubbing, blasting, site stripping, mucking, fill or excavation, dewatering, and grading to allow development of land. Clearing and grubbing is the removal of debris, brush, trees, etc., from the site. Stripping is the removal of the topsoil to provide a stable surface for site and building improvements. Mucking is the removal of unstable soils and materials to ensure a solid base for intended improvements. The grading of land involves moving soil for the purpose of producing a more level surface to allow development of the land. These costs would not have to be reincurred if the building was repaired, rebuilt, or even torn down and replaced with some other type of building. Site grading includes costs to level the area within the building footprint as well as the general site, roadways, parking, and all other site features. General site grading does not include finish grading (base course & fine grading) for roads, parking, and other paved areas. | Land | Non-Depreciable |
| Guard House | A structure designed to house a security guard who limits ingress/egress to the site. Structure is intended to remain in place permanently. | § 1250 | NRRP – 39 Years |
| Heating, Ventilating & Air Conditioning (HVAC) - Residence | Includes all components of a central heating, ventilating and air conditioning system. HVAC systems that are primarily installed for the temperature, humidity, and ventilation of the residence and its occupants are building components. Allocation of HVAC is not appropriate. | § 1250 | RRP – 27.5 Years |
| Hot and Chilled Water System - Building | Chilled Water Systems are closed water systems that provide chilled water for cooling and comfort systems and include any and all components required for a complete and operable chilled water system including chillers, cooling towers, pumps, chilled water piping and associated piping components such as valves, fittings, hangers, supports and insulation. The building chilled water system provides chilled water for building operation and maintenance, such as comfort cooling, and is a building structural component. | § 1250 | RRP – 27.5 Years |
| Indirect Costs | Refer to the Cost Segregation Audit Techniques Guide (Explanation of the Treatment of Indirect Costs). | Allocate according to the ATG description. Rarely are indirect costs allocated to furniture and fixtures as they are typically acquired under separate contract. | |
| Kitchen Appliances | Kitchen - Stove/Oven, Refrigerator, Icemaker, Microwave, Dishwasher, etc. In new construction, typically acquired separate from the construction contract and does not get an allocation of construction direct or indirect costs. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Kitchen Components | Kitchen cabinets, counters, sink, includes plumbing costs. See also Finish Carpentry. | § 1250 | RRP – 27.5 Years |
| Kitchen - Electrical | All general wiring/outlets/switches in kitchen including garbage disposal. | § 1250 | RRP – 27.5 Years |
| Kitchen – Electrical - Dedicated Branch | Wiring/outlets dedicated for range, dishwasher, refrigerator, built-in microwave. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Kitchen – Plumbing | All piping, drains, faucets, garbage disposal and waste piping, sinks and other components of a kitchen plumbing system not specifically identified elsewhere. See Plumbing - Building. | § 1250 | RRP – 27.5 Years |
| Kitchen – Plumbing - Dedicated Branch | Includes water or gas branch hook-ups directly connected to appliances. For example, to a dishwasher, refrigerator/icemaker, or stove/oven. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Kitchen - Stove Hood (Special HVAC) | Built-in stove hoods are considered part of the ventilation system of the unit/building. | § 1250 | RRP – 27.5 Years |
| Land Improvements | Includes improvements directly to or added to land, whether such improvements are § 1245 or § 1250 property, provided such improvements are depreciable. Examples of such assets might include sidewalks, roads, canals, waterways, drainage facilities, sewers (not including municipal sewers in Asset Class 51), wharves and docks, bridges, fences, landscaping, shrubbery, or radio and television transmitting towers. Does not include land improvements that are explicitly included in any other class, and buildings and structural components (as defined in Treas. Reg. § 1.48-1(e)). Excludes public utility initial clearing and grading land improvements, and Site Utilities - Sanitary Sewer. See also Grading - Excavation & Fine Grading for Depreciable Site Improvements, Parking Lots, Poles & Pylons, Roadways, Sidewalks & Curbs, Site Utilities, and Site Work. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Land Improvements – Offsite Dedicated | These assets (sidewalks, streets, lighting, sewer lines, etc.) are constructed as a condition of obtaining building permits. These assets are off the project site and, after construction, the ownership of these assets is transferred to the municipality for public use. The municipality is responsible for maintaining and repairing these assets after the transfer. | § 1250 | RRP – 27.5 Years |
| Landscaping and Shrubbery | The costs of landscaping that would be destroyed upon the replacement of the depreciable asset, such as a building, are depreciable land improvements. General site landscaping that would not be destroyed upon the replacement of the depreciable asset is non-depreciable, as it is inextricably associated with the land. | §§ 1250 / 1245 or Land | Asset Class 00.3 Land Improvement – 15 Years or Non-Depreciable Land |
| Light Fixtures - Exterior – Building | Exterior lighting whether decorative or not is considered § 1250 property to the extent that the lighting relates to the operation or maintenance of the building. This category includes building-mounted lighting to illuminate walkways, entrances, parking, etc. | § 1250 | RRP – 27.5 Years |
| Light Fixtures - Exterior - Accent/Decorative/Special Fixture | Lighting that highlights only the landscaping or building exterior (but not parking areas or walkways) and does not relate to the operation or maintenance of the building. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Light Fixtures – Interior - Building | Includes lighting such as recessed and lay-in lighting, night lighting, as well as decorative lighting fixtures that provide substantially all the artificial illumination in the building. For emergency and exit lighting, see Fire Protection and Alarm Systems. | § 1250 | RRP – 27.5 Years |
| Light Fixtures – Interior - Accent/Decorative/Special Fixture | Light fixtures, such as neon, track lighting, or grow lights which are decorative in nature and not necessary for the operation or maintenance of the building. If the decorative lighting were turned off, the other sources of lighting would provide sufficient light for operation or maintenance of the building. If the decorative lighting is the primary source of lighting, then it is § 1250 property. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Lighting - Site | Pole-mounted or freestanding outdoor lighting system to illuminate sidewalks, parking, or recreation areas. See also Poles & Pylons and Signs – Pylon or Monument. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Lightning Protection and Grounding | If the lightning protection and grounding serve the building, it is § 1250 residential rental property. | § 1250 | RRP – 27.5 Years |
| Loading Docks | Includes bumpers, permanently installed dock levelers, plates, seals, lights, canopies, and overhead doors used in the receiving and shipping of merchandise. | § 1250 | RRP – 27.5 Years |
| Loading Dock - Equipment | Includes items such as compactors, conveyors, hoists, and balers. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Millwork - Building or Structural | General millwork is all building materials made of finished wood (e.g., doors and frames, window frames, sashes, porch work, mantels, panel work, stairways, handrails, and special woodwork). Includes pre-built wooden items brought to the site for installation and items constructed on site such as kitchen or restroom cabinets and counters, door jambs, baseboard, crown moldings, trim, etc. | § 1250 | RRP – 27.5 Years |
| Patios | A ground level, paved outdoor area adjoining a residence or other building typically constructed of concrete, stone, brick, pavers, etc. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Parking Lots | Grade level surface parking area usually constructed of asphalt, brick, concrete, stone, or similar material. Category includes bumper blocks, curb cuts, curb work, striping, landscape islands, perimeter fences, and sidewalks. Also includes traffic control systems (such as traffic lights and detectors, card readers, parking equipment, etc.). | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Parking Lot Canopies | A stand-alone canopy or other covering, whether or not inherently permanent, used to provide shade and protection from the elements over a parking space or parking spaces. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Parking Structures - Attached | Portions of, or improvements to, residential rental property, the purpose of which is to provide parking. Includes garages, canopies, and carports attached to the residential rental property. | § 1250 | RRP – 27.5 Years |
| Parking Structures – Stand Alone | Any structure or edifice, separate from the residential rental property, the purpose of which is to provide parking. Includes garages, parking ramps, or other parking structures. See Chapter 8.B. | § 1250 | NRRP – 39 Years |
| Plumbing – Building | All piping, drains, sprinkler mains, valves, sprinkler heads, water flow switches, bathroom plumbing fixtures (e.g. sinks, bath tubs, showers, toilets) and piping, kitchen sinks, electric water coolers, and all other components of a building plumbing system (water or gas) not specifically identified elsewhere. Includes underground septic systems, tanks, laterals, etc. See also Kitchen - Plumbing. | § 1250 | RRP – 27.5 Years |
| Plumbing – Lawn/Landscaping Sprinkler System | Lawn/Landscaping Sprinkler System. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Poles & Pylons | Light poles for parking areas and other poles poured in concrete footings or bolt-mounted for signage, flags, etc. See also Signs – Pylon or Monument and Light Fixtures – Exterior – Building. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Porches | A covered shelter projecting in front of an entrance to the residence or other building. Typically, an unenclosed floor surface contiguous to the structure and supported above the ground on at least two opposing sides by the adjacent structure and/or posts, piers, or other independent supports. | § 1250 | RRP – 27.5 Years |
| Porte-Cochère, Portico | A structure consisting of a roof supported by the building and columns at regular intervals extending over the entrance drive. Example: the main entry way to a condominium. Similar to that at hotels/motels which are not RRP. | § 1250 | RRP – 27.5 Years |
| Rental Office/Clubhouse Building | Separate rental office/clubhouse building structures that do not meet the definition of RRP under § 168(e)(2)(A). Clubhouses/rental offices are generally for the leasing and administration of the property rental business. They may also provide amenities to the residents such as party or game rooms, meeting areas, kitchen for large group cooking, indoor recreation and entertainment located in a stand-alone building. | § 1250 | NRRP – 39 Years |
| Restroom Accessories/Partitions | Includes shop made and standard manufacture toilet partitions, typically metal, but may be plastic or other materials. Also, includes paper towel dispensers, electric hand dryers, towel racks or holders, cup dispensers, purse shelves, toilet paper holders, soap dispensers or holders, lotion dispensers, sanitary napkin dispensers and waste receptacles, coat hooks, handrails, grab bars, mirrors, shelves, vanity cabinets, counters, ashtrays, baby changing stations, and other items generally found in public restrooms that are built into or mounted on walls or partitions. | § 1250 | RRP – 27.5 Years NRRP – 39 Years |
| Restroom Components | Cabinet, counter, sink, faucet, mirror attached with permanent adhesive, toilet, towel rack, toilet paper holder, flush mounted medicine cabinet, tub, shower, vent fan, etc. Includes electrical and plumbing for community restrooms and residential bathrooms. | § 1250 | RRP – 27.5 Years |
| Roadways | Depreciable improvements directly to or added to land, whether such improvements are § 1245 or § 1250 property. Grade level driveways, roads, and base areas usually constructed of asphalt, brick, concrete, stone, or similar material. Also includes guard rails, curb cuts, and curb work. See also Grading - Excavation & Fine Grading for Depreciable Site Improvements. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Roof | All elements of the roof including but not limited to joists, rafters, deck, shingles, vapor barrier, skylights, trusses, girders, and gutters. Determination of whether decorative elements of a roof (e.g., false dormers, mansard) constitute structural building components depends on their integration with the overall roof, not their load bearing capacity. If removal of the decorative element results in the direct exposure of building components to water, snow, wind, or moisture damage, or if the decorative element houses lighting fixtures, wiring, or other structural components, then the decorative elements are part of the overall roof system and are structural components of the building. See Facades – Mansard Roof. | § 1250 | RRP – 27.5 Years |
| Security Gate - Site | Security gate and equipment limiting access to the site for the protection of the residents, their guests, residences, and their contents. Examples include card key access systems; keyless entry systems; security cameras, recorders, monitors, and related equipment; and wiring and conduit. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Security Systems - Building | Includes security equipment for the protection of the building (and its contents) from burglary or vandalism and protection of residents and their guests from assault. Examples include window and door locks; card key access systems; keyless entry systems; security cameras, recorders, monitors, and related equipment; perimeter and interior building motion detectors; security lighting; alarm systems; and security system wiring and conduit. | § 1250 | RRP – 27.5 Years |
| Sidewalks and Curbs | Depreciable improvements directly added to land, whether such improvements are § 1245 or § 1250 property. Sidewalks and curbs are usually constructed of concrete, asphalt, stone, or similar material. See also Land Improvements. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Signs - Building | Exit signs, restroom identifiers, room numbers, residence number, and other signs relating to the operation or maintenance of a building. See also Signs - Exit. | § 1250 | RRP – 27.5 Years |
| Signs - Exit | Signs posted along exit routes within buildings that indicate the direction of travel to the nearest exit. These signs typically read “EXIT” and may have distinctive colors, illumination, or arrows indicating the direction to the exit. | § 1250 | RRP – 27.5 Years |
| Signs - Exterior | Includes exterior signs used to direct traffic and parking. See also Signs – Pylon or Monument. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Signs - Interior/Exterior | Includes interior signs used to display directories of names or indicate the location of business functions and departments. Not related to the operation or maintenance of a building. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Signs - Pylon or Monument | Pylons made of concrete, brick, wood frame, stucco, or similar materials usually set in the ground or on a concrete foundation, and usually used for signage. See also Poles & Pylons. | §§ 1245/1250 | Asset Class 00.3 Land Improvement - 15 Years |
| Signs - Pylon or Monument Sign Face | Includes only the sign face and/or message screen and related components. Includes property name, brand, images, etc. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Site - Other | See the categories “Grading,” “Land Improvements,” and “Site Work.” | §§ 1245/1250 | Varies |
| Site Utilities | Site utilities are the systems that are used to distribute utility services from the property line to the building. Includes water, sanitary sewer, gas, and electrical services. | § 1250 | RRP – 27.5 Years |
| Site Work | Site work includes curbing, paving, general site improvements, fencing, landscaping, roads, storm sewers, sidewalks, site drainage and all other site improvements not directly related to the building. For sanitary sewers, see Site Utilities. | §§ 1245/1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Sound Systems | Equipment and apparatus, including wiring, used to provide amplified music or sound. For example, music system in pool or clubhouse area. Excludes applications linked to fire protection and alarm systems. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Spa – Freestanding and Hook-ups | Includes free standing Jacuzzi and Whirlpools located in the Apartment/Condo Clubhouse. Does not include spa hook-ups that may be associated with swimming pools or pool equipment. See also Furnishings - Pool, Clubhouse, Exercise Room. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Stairs | A structure consisting of a flight of steps leading from one floor or level to another and related to the operation or maintenance of a building. Includes railings and hand railings (banisters). | § 1250 | RRP – 27.5 Years |
| Trash Chutes | Formed metal chute, which are constructed and installed essentially vertically through the structural floors of the building. The chutes are concealed within ceilings, floors, and/or walls and are enclosed by concrete or steel structural elements. | § 1250 | RRP – 27.5 Years |
| Trash Enclosures – Attached | Enclosures for waste receptacles that are attached to the building. Typically constructed of the same materials as the building shell with either interior or exterior access. These trash enclosures are an integral part of the building shell and cannot be moved without damage to the underlying building. | § 1250 | RRP – 27.5 Years |
| Trash Enclosure – Not Attached | Enclosures for waste receptacles, typically constructed on a concrete pad with its posts set in the concrete. Permanent structure serving the operation and maintenance of the building along with safety and decorative functions. | § 1250 | Asset Class 00.3 Land Improvement – 15 Years |
| Wall Coverings - Permanent | Includes interior and exterior paint; ceramic or quarry tile, marble, stone, brick, and other finishes affixed with mortar, cement, or grout; paneling, wainscoting and other wood finishes affixed with nails, screws, or permanent adhesives; and sanitary kitchen wall panels such as fiberglass, stainless steel, and plastic wall panels. | § 1250 | RRP – 27.5 Years NRRP – 39 Years |
| Wall Coverings - Nonpermanent | Strippable wallpaper that causes no damage to the underlying wall or wall surface. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Walls – Exterior | Includes all exterior walls and building support regardless of construction materials. Exterior walls may include columns, posts, beams, girders, curtain walls, tilt up panels, studs, framing, sheetrock, insulation, windows, doors, exterior façade, brick, masonry, etc. | § 1250 | RRP – 27.5 Years NRRP – 39 Years |
| Walls – Interior | Includes all load bearing interior partitions regardless of construction. Also includes non-load bearing partitions regardless of height (typically constructed of studs and sheetrock or other materials) that divide or create rooms or provide traffic control. Includes rough carpentry and plaster, dry wall or gypsum board, and other finishes. | § 1250 | RRP – 27.5 Years NRRP – 39 Years |
| Walls Interior Partitions | Interior walls where the partition can be 1) readily removed and remain in substantially the same condition after removal as before, or 2) intended to be moved and reused, stored, or sold in their entirety. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |
| Windows | Exterior windows, including residential, office/clubhouse, and building windows, and exterior glass partitions expansion joints and moisture barriers. | § 1250 | RRP – 27.5 Years NRRP – 39 Years |
| Window Treatments | Window treatments such as drapes, curtains, louver, blinds, post construction tinting and interior decorative theme décor which are readily removable. | § 1245 | Asset Class 57.0 Distributive Trades and Services – 5 Years |