Depreciation 101: The Foundation of Real Estate Tax Strategy

In this premiere episode of Real Estate Professional Status Season 2! we dive into depreciation, the tax strategy every real estate investor must understand before jumping into cost segregation or accelerated depreciation. Too often, investors focus on the benefits of cost segregation without grasping the fundamentals of depreciation—leading to confusion and missed opportunities.

 

What You’ll Learn in This Episode:

 

🔹 What is depreciation? A clear, practical breakdown of how the IRS allows investors to deduct the wear and tear of a building over time.

🔹 Why real estate isn’t expensed immediately—and how depreciation turns your investment into a powerful tax shield.

🔹 The truth about “paper losses” and why depreciation can save you thousands (or millions) in taxes even though your property may be appreciating in value.

🔹 The IRS-defined useful life of real estate: 27.5 years for residential, 39 years for commercial—and why this matters.

🔹 Land vs. building: What actually gets depreciated and how property tax assessments determine the allocation.

🔹 Leverage & bonus depreciation: How investors can depreciate more than their initial down payment using financing strategies.

 

This episode lays the foundation for future deep dives into cost segregation, passive activity rules, the short-term rental loophole, and real estate professional status. If you want to offset your gains, minimize taxes, and maximize cash flow, this is where it all begins.

 

👉 Subscribe now and start leveraging depreciation like the pros!