Exam 25: Depreciation, Cost Recovery, Amortization, and Depletion

The election to use ADS is made on a year-by-year, property-class by property-class basis for real and personal property.

In April of 2015, Brandon acquired five-year listed property (not an automobile) for $30,000 and used it 70% for business. No election was made regarding Sec. 179 and bonus depreciation was not available. In 2016, his business use of the property dropped to 40%. Which of the following statements is true?

Capital improvements to real property must be depreciated over the remaining life of the property on which the improvements were made.