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Updated about 6 years ago on . Most recent reply

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Aaron Moayed
  • Real Estate Broker
  • Sacramento, CA
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Have You Ever Been Able to Depreciate to the Full Amount?

Aaron Moayed
  • Real Estate Broker
  • Sacramento, CA
Posted

Has anyone actually made enough cash flow to use their property depreciation?

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Natalie Kolodij
  • Tax Strategist| National Tax Educator| Accepting New Clients
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Natalie Kolodij
  • Tax Strategist| National Tax Educator| Accepting New Clients
ModeratorReplied

As others have mentioned cash flow and depreciation are completely unrelated. 

That's actually the big tax benefit there is you get to deduct something that DIDN'T actually cost you a cash outflow. 

You do NEED to depreciate. The IRS has it as allowed or allowable- meaning if you don't depreciate, they'll tax you as though you did when you sell. 

When You Hit the 27.5 year mark on your property and have no more depreciation you will show more TAXABLE income on paper, but your cash flow won't change. 

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Kolodij Tax & Consulting

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