The government says that the building is going to be worthless after a set period so they let you write off a little bit every year. It doesn’t matter how much cash flow/profit you make. You take the depreciation expense as a deduction each year. In fact if you do not take it, when you sell, you recapture it as if you had taken it. So take advantage of it and deduct against profits.
Depreciation on rental propertoes - Posted by sydel (FL)
Posted by sydel (FL) on November 01, 2000 at 14:16:27:
This may be an unsophisticated question. To take the depreciation allowed on rental properties, do you first need to show a loss? In other words, do your rental expenses need to be higher than your rental income (not something to strive for!) before depreciation will work?