Real Estate Depreciation

[Patrick Gilbert]

So I understand the concept of depreciation - appreciating asset that degrades ("depreciates") over 27.5 years so you get to take a loss on taxes. My question is: how is that depreciation number determined, specifically when using the BRRRR method? Is it determined via initial purchase price or can you use ARV appraised value? It could obviously vary greatly depending on the amount of rehab needed. Thank you!