depreciation?

[Andrew M.]

would someone please explain the concept of depreciation in regards to renting RE. i keep seing the term used but never understand how it works
thankyou

[Ryan Webber]

Depreciation is a tax deduction of your income that is factored from taking the price of the building (not including the land) and dividing it by its predetermined usable life (I think its factored on a 29 year life for residential). So if you bought the property for $100,000 and the value of the land is $13,000, then you have a building worth 87,000, which divided by 29 is $3,000 per year that you can deduct from your income. There are also different types of depreciation. The one I described is called staight line.