How to calculate the depreciation cost for my 2 U.S. rental studios that I bought in 2011 one costing $60,000 (305 sq ft) and the other costing $39,000 (277 sq ft).

[abdel]

I never claimed depreciation costs for the past 5 years but my net income was the most in 2015 so having a depreciation cost will reduce my personal income tax. My studios are like rooms in a condo-hotel in Miami Beach Florida so what is the depreciation % to be used? They both are rental units

[TurboTaxJeffrey]

I understand the desire to claim CCA on the rental properties...however may I offer some food for thought.

Most items that are depreciated for business use actually do have a declining value...in other words, if you go to dispose of the item, you are not likely to recover the full cost that originally went into it.  Real estate is different...it can increase in value.  If you have depreciated a building (you can't claim depreciation on land) it generally is over a longer period of time...buildings depreciate at 4% per year.  However, if you were to sell the property, and the selling price was greater than what you had depreciated the property to, you have to show the full amount of the difference, up to the original cost of the building, as recapture, and this is income.  This income is taxed at 100% of value.  You may have owned the property for 10 years...and claimed depreciation of approximately 40%.  To claim this full 40% as additional income IN ONE YEAR could have a drastic affect on your tax bracket.  If the building is sold for more than it was acquired for, the difference is considered a capital gain, and capital gains are taxed at 50% of the value...a favourable tax rate.  Being taxed 100% on the full amount of CCA which could be recovered can be quite detrimental.

What you may wish to do before claiming CCA on the cost of any rental property is take a look at how real estate prices are trending in that area.