1. Tax depreciation is lower in the first year because assets are assumed to be in services for 6 months. 2. Real property is depreciation stright-line over 27.5 years for residential property and 39 years for nonresidential property. 1. Tax depreciation is lower in the first year because assets are assumed to be in services for 6 months. 2. Real property is depreciation stright-line over 27.5 years for residential property and 39 years for nonresidential property