Real Estate & Investing

Depreciable Basis

Depreciable basis is the portion of an asset's tax basis that is eligible to be depreciated.

Quick answer

Depreciable basis is the portion of an asset's tax basis that is eligible to be depreciated.

It matters because not every dollar paid for property becomes depreciable cost.

Land value is usually excluded when calculating the depreciable basis of a rental building.

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Plain-English Definition

What Depreciable Basis means

Depreciable basis is the portion of an asset's tax basis that is eligible to be depreciated.

Why it matters It matters because not every dollar paid for property becomes depreciable cost.
Simple example Land value is usually excluded when calculating the depreciable basis of a rental building.
Related Questions

Questions people ask about Depreciable Basis

What does Depreciable Basis mean?

Depreciable basis is the portion of an asset's tax basis that is eligible to be depreciated.

Why does Depreciable Basis matter?

It matters because not every dollar paid for property becomes depreciable cost.

What is a simple example of Depreciable Basis?

Land value is usually excluded when calculating the depreciable basis of a rental building.

When should I ask a CPA about Depreciable Basis?

Ask a CPA when the term affects property tax planning, rental activity, depreciation, basis, or gain on a sale.

How is Depreciable Basis different from Rental Property Basis?

Depreciable Basis means Depreciable basis is the portion of an asset's tax basis that is eligible to be depreciated. Rental Property Basis means Rental property basis is the tax basis used to measure depreciation and gain or loss for rental real estate. The difference is that they apply to different tax, accounting, or business situations and should not be treated as interchangeable.

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