How do you determined allowed depreciation when you are accrual based and you have a capitlized cost that is payable to cash basis related party?
Depreciation has nothing to do with whether you're accrual or cash based. The related party and anti churning rules limit the deduction however. Depending on how closely you're related you may be limited to depreciating the remaing basis from the seller or FMV, whichever is lower. You also can't take bonus depreciation or accelerated on it. You'll have to use straight line. For all of the regulations, download the publication on depreciation from www.irs.gov and read the related party rules.
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