What is Rental Property Depreciation? | Investing for Beginners

Does that mean you can no longer depreciate your rental after 27.5 years?

How do you determine how much value to remove for the land portion of the asset?

Can one depreciate the home if one buys the rental out right with no mortgage?

You explained that better than my professor 😂 thank you 😊

Morris you are genius

recommend adding "for real estate investing" on the description. I need a video "for rental equipment" please

the explanation
was so clear

✔️

It’s important to note that when you go to sell property that you depreciated, any gain on the disposition is recaptured (included in income) as ordinary income up to the amount of the depreciation previously allowed or allowable for the property.

It may be a deduction now, but it will be taxable income later when you go to sell the property.

Nice job. I'm trying to get information about how to determine the cost basis. I purchased the house 12/2019. I'm renting out 20% of the space, living in the rest. I spent $5,000 to create the living space for the tenant. Adding that to the cost of the house will not allow me to enjoy the tax benefit of that expense. And what closing costs are added to the cost? There's so much more to understand.

Nice video and good stuff!!! I have a question. I bought a house in 2015 and lived there until Dec 2018 and then rented for the whole 2019. Can I do 27.5 year depreciation for 2019? Has IRS changed anything about 27.5 year rule for 2019?

Hi Moois,
Im one of your fan for so long.
Can you do a cost segregation in a new home that we bought for rental? Any other tax benefit that I could use beside Rental Property Depreciation?
Thank you.

It's really pointless. You will have to pay the "recaptured CCA" when you sell your property in almost all the cases.

I dont know if you'll respond but can you use this depreciation tactic to completely avoid taxes or just mitigate it

This tax advantage definitely favors areas with low land-to-building valuation ratios.

Damn, this saved me a lot to look over when trying to figure out my depreciation. Thank you for this.

Thank you for the video and for explaining it so simply!

I would reccommend this guy teach anything.

You got a new sub

Great stuff, thanks! I'm sure you simplified the $50k example for the video, but I wanted to be clear. We only divide the "improved" portion of the $50k, correct?

How do you figure out the value of just the house vs house and land? Also, I rent a basement apartment in my house. Would I use the same percentage I use for other expenses?

So on my property card for my rental property land $80,500, Impr. $119,500, Total $200,000. The rental income is $21,600/yr. Would my depreciation be $21,600- $119,500 or $21,600-$200,00? Thanks, Mark

how do i determine of my house value? if i inherited from parent for $1. They bought it around 100K many years now it worth probably over 500K+ . Thanks

I have a question that i look all over the internet and i cant find the answer. I hope some one here have the answer .
The depreciation is calculated from the money ypu have left after expenses like mortgage and water bill . Example
I charge rent 1k per month x 12 is 12,000 a year ypu use this amout or you use the amount left after expenses like i charge 1k per month but i pay 50 for water and 600 fpr mortgage i have left 350 per month x 12 is 4,200 per year. Which one you use yo calculate depreciation please some answer ???????

Great information. Thank you for sharing and making it easy to understand! 👍🏼

can you answer some questions for me?

Institutionalized genocide

Is there an income limit for claiming depreciation? I have a 9-to-5 job that earns me 170k a year. I recently purchased a rental house. Can I claim depreciation on it? Or does my 170k a year income prevents it?

I googled it. And in almost all articles about depreciation says “if your income is 150k or above, you cannot claim rental loss”.

This confused me. Articles are about depreciation. But when I read the part I am interested in, they switch the language to “rental loss”. Unless depreciation is considered part of rental loss, I don’t see why everyone would put that in an article about depreciation.

How much depreciation for a commercial property that was built in 1990. The cost without land is $650,477? Thank you

This is great news! We were able to find a lot of useful information here, Clayton. It will definitely help us as we continue to grow our real estate business.

So the 27.5 years, is that from the time it was build until it’s 27.5 years old. You can deppreciate it & if your house is older then 27.5 years old you can not write that off? 🤔

Why do some people think you cannot claim depreciation on a non-business, investment rental property?

Why does Turbo tax ask for the value of the land? What should I enter?

First I just want to say thanks for all the content y’all put out because it’s definitely helped me have a lot more financial freedoms.

Now as far as depreciation goes I understand that. You explained it perfectly. The problem is I transferred the title of my rental house into my revocable living trust. Just incase worst case scenario happens, having that living trust makes it easier on my family. Now with that I’ve heard a couple different people tell me that since I transferred title of house into my revocable living trust, I am no longer eligible for this tax benefit. If you could clarify this that would be greatly appreciated.

Hello and thank you for the knowledge you shared on the apraise value of the property and it's depreciation by 27.5 years. I have aquestion, which states in the united states is this value valid for ? I'm in california, and does it apply to Residential and Commercial properties, or only one of them?

The depreciation is only on purchase price? Or after all my renovations can I depreciate from new appraised value?

Why doesn't tax software like Turbo Tax ever ask about depreciation?

Too much chat up front and did not mention what happens after 27.5 years or at sale time.

Which land value/property assessment year do you use to calculate the depreciation. The year that you purchased the property?

Depreciation is a boil on the ass of many American cities. Landlords need to have their property confiscated or taxed away from them if they refuse to lower their rents enough to attract tenants. Keep it 50 percent occupied or pay a vacancy tax.

Geez mate, this channel has come a long way

Are ACTUAL repairs deductible? Cause I have a house that needs substantial expensive foundation work.

i am newly home owner and this is very helpful and i wanted to say thank you!!

Thanks, very helpful.

how do we identify cost of land and property for realestate depreciation

Depreciation based on purchase price or appraised value?

Does depreciation count against DTI now? Last two years they’ve been counting it against me but underwriter telling loan officers the ability to add it back in is gone. This is a huge deal esp if it happened in the quiet of the night!

Thanks for your clear info!!

I dont have any rental properties!!!

Unfortunately, you did not explain what happens when you sell the property. You will have to return 25% in taxes.