Rental Tax Depreciation

[Mark Williams]

Is someone able to lay out the basics in the simplest form tax depreciation….I would greatly appreciate it

[David M.]

@Mark Williams

of course, talk to a qualified professional...

But, in the "simplest form," if you have an investment property (not a flip), you can deduct 1/27.5th of the value.

So lets say at the end of the year your rent less your expenses is $6k positive --- you made some money.  Lets say your depreciable value is $275k.  1/27.5 of that is $10k.  So you can deduct $10k on your taxes, so to the federal irs it looks like you lost $4k.  Voila --- no taxes to pay on that income.

(you asked for simplest, but many will jump in on the "depreciable value" is the "improvement" portion as oppose to land value of your property.  You find that value by looking up the assessed improvement and land values and using that ratio against your cost basis to determine...)

Anyway, I'd be happy to chat if you like.  Just send me a message.  Good luck.