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Real Estate Tax Depreciation Basics

Here’s what real estate investors need to know about depreciation and the long-term implications of deducting it.

[Updated: Feb 17, 2021 ] Nov 06, 2019 by Matt Frankel, CFP

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Month the Property Was Acquired First-Year Depreciation as a % of Cost Basis
January 3.485%
February 3.182%
March 2.879%
April 2.576%
May 2.273%
June 1.970%
July 1.667%
August 1.364%
September 1.061%
October 0.758%
November 0.455%
December 0.152%

Data source: IRS.

Tax Year Cost Basis Depreciation Deduction Cumulative Depreciation
2019 $200,000 $6,364 $6,364
2020 $200,000 $7,273 $13,637
2021 $240,000 $8,727 $22,364
2022 $240,000 $8,727 $31,091
2023 $240,000 $8,727 $39,818

Data source: Author calculations.

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