Claiming Depreciation for Tax porposes.

[Phineas Howie]

Somewhat confused here, how can a property appreciate,  yet one can claim depreciation for tax purposes. I heard Depreciation is a bigger factor for higher end property just how big is factor would it be for say a 350-400 thousand dollar home? 

[Dave Foster]

@Phineas Howie, it's tax write off that is a game of pretend.  The IRS let's you pretend that the value of the structure is losing value every year.  So in theory at the end of 27.5 years as @Zoltan Fagyal said the house and land should only be worth the value of the land.  

But we all know that isn't true generally over the long term. The tax write off the IRS gives you for pretending the value of your investment property goes down every year must be re-paid if you sell and the house has actually appreciated or not really depreciated.