Depreciation for used appliances occurs over five years from time of purchase. This means that dividing the sum of the purchase price, delivery charge, sales tax and installation fees by five yields the annual amount of depreciation. This only applies to appliances in a rental property, not a primary dwelling.
According to the IRS rules, an appliance purchased for a rental property is treated as though it had been bought and put into service on July 1 of that tax year, no matter when it was used. This is known as the "Half Year Convention," and IRS Publication 946 indicates how to calculate proper depreciation on pages 70-73. The exception happens if the owner of a rental unit spends more than 40 percent of total dollars on appliances for a rental property in the last quarter of the tax year. In this case, purchases group by quarter, and each group is depreciated at the "mid quarter."
Another important tip is the requirement that if an owner buys a new appliance for his primary dwelling and moves his used appliance into the rental unit, the owner can only depreciate based on the value of the appliance at the time of the move rather than the price of the new unit.