I currently own a rental unit on a lake. We purchased a boat slip just last year to rent as well, and I am trying to figure out what depreciation method and life to use for setting this asset up on a depreciation schedule? Any help on this would be appreciated.

the most commonly used is the straight line method. The theory behind it assumes that an asset should be depreciated in EQUAL amounts each year until it reaches its residual value (or scrap value). The residual value is the value that the business expects it to be worth when the asset has no use anymore.
you must predict the expected life of the asset, i.e. the number of years that you believe the asset will be of use to the business.

To calculate each years depreciation using the straight-line method, the formula is:

Depreciation = Original Value (less) Residual Value / Expected Life

I currently own a rental unit on a lake. We purchased a boat slip just last year to rent as well, and I am trying to figure out what depreciation method and life to use for setting this asset up on a depreciation schedule? Any help on this would be appreciated.

I agree you should use the straight line method for depreciation. This is the most simple and makes the most sense I think for this example. Under GAAP there is no listing or suggestions of the estimated useful life you should use. It should simply be your best reasonable estimate based on past experience, manufacturer suggestions or any other evidence you can find. I wouldn’t worry about salvage value too much, many times it is okay to assume zero and then if you do sell it for something at the end of useful life you just book it as a gain.

Now when it comes to tax depreciation there are strict rules you have to follow, call the Modified Accelerated Cost Recovery System or (MACRS) pronounced “makers”. These rules are complex so I recommend getting some kind of software that can calculate this for you. Or if you have someone else do you taxes don’t worry it will be their problem. More info on this can be found in PUB 946 which is here: http://www.irs.gov/pub/irs-pdf/p946.pdf

If you have more questions let me know.