Chattel Appraisals Explained
A chattel appraisal is tax tool for residential real estate investors. It is a valuation of all the "personal property" in a rental for the purpose of placing this value on an accelerated depreciation schedule.Personal Property in the eyes of the IRS is not the same as traditional real estate professionals. In the eyes of the IRS, "personal property" are all those things that your tenant wears down or uses up. We're talking about kitchen cabinets and countertops, light fixtures, most kinds of flooring, window coverings--even landscaping. For more items that qualify as chattel, see the IRS's Audit Technique Guide.
Accelerated depreciation is valuable because it reduces an investor's net tax burden significantly, and can contribute to positive cash flow, thereby creating a profitable real estate investment. Here is a complete list of the benefits of a chattel appraisal. Depreciation is extremely valuable to those looking to offset income made by investments. Depreciation can also offset any gains you might have on properties that you sold in a particular year.
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