The Wonder That Is Real Estate Depreciation
Real Estate tax depreciation is a wonderful concept that every Real Estate investor should familiarize themselves with. During tax season, depreciation can help maximize your return. Now, depreciation as we know may sound like a bad thing but with a little bit of math, we can use it to our advantage to accomplish some amazing things come tax time. Depreciation can allow you to show negative income on a property that has positive cash flow. Did we peak your interest?
Let us dive in further.
What is Real Estate depreciation? Real Estate depreciation is the ability to write off the value of the improvements that are on your Real Estate property. The improvements include any buildings or structures on property and not the land the property sits on.
The IRS recognizes that as a home gets older, its appliances, its systems, and its structures are going to age and they will need improvements over time. Because of this, the IRS allows you to depreciate that asset as it ages and that depreciation can pass through to your personal income taxes and can become a wonderful benefit.
To hear a real world example about how amazing depreciation can be and to find out more, please watch the video below.
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