Explained: Depreciation of rental property (tax deduction)

Lydia PatelJul 10, 20261m 25s20 viewsScore 85
Pricing & Profitability
intermediate
Tax Strategy
Profitability
Airbnb
Expenses
Bookkeeping
M

Summary

AI-generated

This video explains how rental property depreciation works as a powerful tax deduction to offset rental income. It highlights the differences between residential (27.5 years) and non-residential/STR (39 years) depreciation schedules and why hosts should always take the deduction regardless of future recapture taxes.

Key insights

  • Only the value of the structure can be depreciated; the value of the land is not depreciable because land does not wear out or get used up.

Mistakes to avoid

  • Failing to correctly separate land value from structure value, which can lead to over-calculating depreciation and potential issues during an audit.

Tools & resources

  • Investopediawebsite

    A comprehensive financial education website used as a source for depreciation formulas and rules.

Curated by Learn STR by GoStudioM · Summary & key insights generated by AI · Reviewed by editorial