What is the depreciation method for residential properties?

The straight line basis is the correct method for depreciating residential properties. This approach allows property owners to deduct an equal amount of depreciation each year over the property's useful life, which for residential properties is typically 27.5 years. This method simplifies tax preparation because it provides a consistent annual deduction, making it easier for owners to manage their finances and predict tax liabilities.

In contrast to the straight line method, which spreads out the deduction evenly, an accelerated basis would allow for larger deductions in the earlier years of ownership, which is not the standard approach for residential properties as defined by tax regulations. The declining balance method and the sum of the years' digits method also focus on accelerated deductions, but these are more commonly used for personal property or commercial real estate rather than residential properties. Thus, for residential real estate, the straight line basis is the appropriate depreciation method.