Over how many years may nonresidential investment property be depreciated?

Nonresidential investment property is depreciated over a period of 39 years according to the Modified Accelerated Cost Recovery System (MACRS) used by the IRS for tax purposes. This long depreciation period reflects the extended usefulness of such properties compared to other types of assets.

In practice, this means that property owners can deduct a portion of the property's cost each year for 39 years, which helps to spread out the tax burden and encourages investment in real estate. Properties that typically fall under the nonresidential category include office buildings, retail spaces, and warehouses.

This depreciation method provides a significant tax advantage as it allows for a consistent reduction in taxable income over the lengthy period. Understanding this timeline is crucial for real estate investors and professionals when planning financial strategies and forecasting cash flows.