When Depreciation Begins and Ends Words you may need to know (see Glossary): Basis Disposed Exchange Placed in service You begin to depreciate your property when you place it in servicefor use in your trade or business or for the production of income. Youstop depreciating property either when you have fully recovered yourcost or other basis or when you retire it from service, whicheverhappens first. Placed in Service For depreciation purposes, you place property in service when it isready and available for a specific use, whether in a trade orbusiness, the production of income, a tax-exempt activity, or apersonal activity. Even if you are not using the property, it is inservice when it is ready and available for its specific use. Example 1.You bought a home and used it as your personal home several yearsbefore you converted it to rental property. Although its specific usewas personal and no depreciation was allowable, you placed the home inservice when you began using it as your home. You can claim adepreciation deduction in the year you converted it to rental propertybecause its use changed to an income-producing use at that time. Example 2.luxuriose Suite HajduszoboszloYou bought a planter for your farm business late in the year afterharvest was over. You take a depreciation deduction for the planterfor that year because it was ready and available for its specific use. Cost or Other Basis Fully Recovered You have fully recovered your cost or other basis when you havetaken section 179 and depreciation deductions that are equal to yourcost or investment in the property. Purpose of Form 4562 Retired From Service Lloret de Mar accommodationYou stop depreciating property when you retire it from service. Youretire property from service when you permanently withdraw it from usein a trade or business or from use in the production of income. You can retire property from service in the following ways. Sale or exchange. Abandonment. Destruction.