What is the required depreciation method for residential real property placed in service after 1986?

The correct method for depreciating residential real property that is placed in service after 1986 is the straight-line method over 27.5 years. This specific requirement is outlined in the tax code and applies to residential rental properties, distinguishing them from non-residential properties and other asset types that may have different depreciation periods or methods.

Using the straight-line method means that the property’s depreciation is evenly spread over the 27.5 years, providing a consistent deduction each year that reflects the wear and tear on the property. This approach simplifies calculations and tax reporting for property owners, ensuring that they can accurately reflect their investment's depreciation in their tax returns.

Other methods or durations would not be applicable in this context, as non-residential properties and different asset types have their own required depreciation methods and timeframes. The emphasis on the straight-line method for this asset class demonstrates the IRS's intent to standardize how residential investment properties are depreciated for tax purposes.