learn.howToCalculate

learn.whatIsHeading

Real estate depreciation allows investors to deduct the cost of a rental property over its useful life (27.5 years for residential, 39 years for commercial in the US), reducing taxable rental income even if the property is appreciating in value.

Stapsgewijze handleiding

1. 1Annual depreciation = (Purchase price − land value) / 27.5 years
2. 2Land cannot be depreciated — only the building (typically 70–80% of purchase price)
3. 3Depreciation is a "paper" deduction — it reduces taxable income without a cash outflow
4. 4When you sell, depreciation is "recaptured" and taxed at up to 25%

Uitgewerkte voorbeelden