Real Estate Investing Glossary
Depreciation
Depreciation is a tax deduction that spreads the cost of a building over its useful life.
Depreciation is a tax deduction that spreads the cost of a building over its useful life. It is an accounting deduction and does not mean the property is losing market value.
Why it matters to a Las Vegas investor
Depreciation can reduce the taxable income a Las Vegas rental produces, which is part of why investors consider the tax treatment of real estate. How it applies depends on your situation, so check with a tax professional.
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Questions about Depreciation
Does depreciation mean my property loses value?
No. Market value can rise while the building is depreciated for tax purposes.
Is land depreciated?
No. Land is not depreciated. Only the building and certain improvements are.