8 ms·

You don't write off your rental income. You depreciate the rental property over 27½ years and write that off against your rental income. Few rental properties w

You don't write off your rental income. You depreciate the rental property over 27½ years and write that off against your rental income. Few rental properties will have under a 3.7% ROI where depreciation would cover all the income. At best you might be paying half tax. In your example, you'd pay no tax, but you'd lose out on the potential income you could have had with better investments (and lose about 6 years' worth of depreciation by the depreciation then being too fast). And flipping to more and more expensive properties through 1031s requires more and more capital and only makes it cover less taxes. There's no tax benefits versus just keeping the first property and paying all the taxes and buying a separate property to depreciate. If you sell a $500k property earning $40k/year where the depreciation covered 45% of your income, and you buy a $1 million property earning $80k/year, you get a new $500k to depreciate $18k/year. Then the depreciation only covers 22% of your income. Depreciation is very fundamental to business tax law. I'm not sure how you'd "fix" that without penalizing non-rental companies for expanding.

sbf501 4y ago
We need a third party to validate both of your claims, because I don't know where to start to understand who is right. This is an example of someone (me) who wants to understand the issue, but would need to google for days to understand both arguments.
- deleted 4y ago
  [deleted]
- toss1 4y ago
  The rebuttal by mminer237 is much closer to right [0]. Also it isn't even as good as mminer237 mentions, as many states also have a much lower exemption, and there is work in congress to get rid of the step-up in basis (a bad thing, imo) and to reduce the $12MM lifetime gift & estate exemption (a very good thing). So yes, there are some advantages, but OP is vastly exaggerating as if it is some freebie to landlords when it is not. There were some freebies introduced in the bills in the Trump term for the type of LLCs that Trump runs, but IDK if they were fixed in legislation in this term. If you want a general complaint, perhaps the angle is that capital is taxed much less than labor, under some notion that lower taxation is necessary to get people with capitol to actually deploy it in investments. I think that is provably false, and certainly does not require the level of tax code favoritism it currently enjoys. [0] source: tax & estate attny at biglaw firm in the household, although this is just from info absorbed by osmosis over years and is NOT a detailed legal analysis.
  - sbf501 4y ago
    Thank you. > If you want a general complaint, perhaps the angle is that capital is taxed much less than labor, under some notion that lower taxation is necessary to get people with capitol to actually deploy it in investments. Yes, I recall when cap gains taxes dropped significantly during GWB and was, sadly, happy. Of course, I was just a dumb 20-something and didn't realize how much of boon to the wealthy it was.
    - robertlagrant 4y ago
      It's a boon to anyone whose job was created by it as well, and whose life was made cheaper by capital investments in automation and/or scale.
      - toss1 4y ago
        Yes, the question is how much of a boon it needs to be. The fact of the matter is that people with capital want to invest and grow that capital. It is absolutely false that if that activity is taxed, it will disappear. Just as obviously, if all capital gains are taxed at 100%, it will disappear. The question is the balance - how much to tax it so that the wealthy don't merely get wealthier at everyone elses' expense. It may also be a good idea to tax underutilized capital, as land is taxed.
        robertlagrant 4y ago
        If you get all of that just right you may even extract enough money to pay for all the many governmental systems required to administrate it. Sadly none of that will have done anything as useful as an investment in a company that makes people's lives cheaper or better.
      - kelnos 4y ago
        Do we actually have strong evidence that these sorts of tax breaks actually stimulate this kind of economic activity to the degree where it's actually worth it? It... doesn't seem like we do? I mean, it's not like pre-1990 we had skyrocketing unemployment and underinvestment in business, and lowering capital gains taxes fixed it.
deleted 4y ago
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deleted 4y ago
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huevosabio 4y ago
You fix it by deprecating only the improved value. The land beneath a building does not deprecate, whereas the value of the building should. Since for most properties the majority of the value is in the land itself, your basis to deprecate would be much lower, and more realistic.
- ouEight12 4y ago
  > Since for most properties the majority of the value is in the land itself I'm not sure that's the case for the majority of the country. At-least it's not here in my greater metro area (suburbs or rural... yuppie downtown areas... perhaps, but again, downtown is not majority for most places)
  - randomdata 4y ago
    It may be not true right now amid difficulty in finding labour and materials. Much like cars, the value of a used home is proportional to the cost of building a new home. When new homes are difficult to acquire, cost of used homes go up. Used cars have also increased in value lately for the same reason. This is not typical, however. These are normally depreciating assets. Under usual market conditions, houses are headed to being on the older side and reaching the end of their effective lifetime, leaving little value left in the structure. You can renovate a home to bring it back to new-like condition, which restores value to the structure, but that cost must be maintained in the equation.
  - wizofaus 4y ago
    I'd think anywhere where apartments are viable to build it would be true, and of course large rural properties. Whether they make up "most properties" I'm not sure - it would surprise me if much less than half of properties in Australia were sitting on land worth more than the house itself (despite the enormous amount of undeveloped/low-value land we have!).
- dbjacobs 4y ago
  This is already the case. You can only depreciate the building value not the land portion. So single family homes have much lower depreciation since most of the value is typically in the land vs an apartment which is the opposite.
kaibee 4y ago
> I'm not sure how you'd "fix" that without penalizing non-rental companies for expanding. A land value tax would be a pretty straight forward solution to most of the issues around this.
- pooper 4y ago
  I think the only long term solution is a federal land and building tax. This is too important to leave to states (and definitely local) governments. A high tax with no credits, deductions, exemptions. Then, from this tax, we can pay "forward" every adult tax payer (not children, only adults) a fixed amount that pays the cost of an imaginary nationwide median cost of a two bedroom unit. Only adults, all adults, regardless of whether you have no child or eight children. Must file a federal income tax return to qualify. Median nationwide cost somehow calculated and weighted by population, hopefully updated more than once a decade. Everybody from Amazon.com to Walmart pays this land + building tax regardless of whether they are in Manhattan, New York or Deport, Texas. No exceptions.
- djbebs 4y ago
  Define land value.
  - kelnos 4y ago
    This isn't hard: whatever a local assessor determines it to be, something they already have a lot of experience doing.
    - djbebs 4y ago
      So this is basically a "your tax is whatever I deem it to be"?
      - spiralx 4y ago
        Well yes but that's also the case with property taxes. A reasonable figure based on current market values seems simpler to calculate for unimproved land than it does for property tax, which includes the value of the unimproved land as well as everything else built or changed. And because it's the value of the _unimproved_ land it's based on, the value would be relatively stable over time as well as not varying much between one area and similar areas nearby, whereas property taxes are based on values that can change dramatically over time from one place to the next, which can lead to mis-valuations and general stress from constant changes.
happiness_idx 4y ago
As a home-owner not landlord (I am against the idea of owning more property than my family will use) I WISH I could write off half of my property tax.
- JamesBarney 4y ago
  I wish I could write off all my personal expenses as business expenses. But I understand why the laws are written such that I can't
  - mindslight 4y ago
    I actually don't understand why the laws are written that way, apart from the political goal of causing W2 workers ("suckers") to bear a disproportionate tax burden. A W2 worker incurs expenses that are necessary to earn their income, including food, transportation, clothing, and healthcare. If they were able to account for these necessary expenses as a business does, the expenses would be directly deducted from income. And that's not even getting into the S-corp self-employment-tax dodge.
    - grog454 4y ago
      > If they were able to account for these necessary expenses as a business does, the expenses would be directly deducted from income. I thought that's mostly the point of the standard or itemized deduction (which businesses don't and shouldn't get).
      - mindslight 4y ago
        For one, no, those expenses aren't deductible even if you do itemize. They're considered "personal expenses" even though they were necessary to earn that W-2 income. If you buy a car and use it at least 50% to get to 1099 client(s) you can deduct that portion of it (including accelerated depreciation). But if your income is coming from W-2 job(s), you simply cannot. For two, the standard deduction is better seen as a personal exemption (which it subsumed), giving everyone a level of income that they don't have to pay tax on. Especially given that business expenses generally flow through as direct subtractions regardless of the standard deduction. There is definitely tension between allowing deductions to account for actual income fairly, and the resulting (de facto) requirement that everyone do minutiae accounting for their personal finances.
UncleOxidant 4y ago
A 1031 exchange also has to be completed within 45 days. That's pretty tight.
- oogali 4y ago
  Identify 3 candidate properties within 45 days. Close on one property within 180 days.
abeppu 4y ago
This is certainly not my area so I could be missing something basic. But after you sell a property, why shouldn't that force a reevaluation on past depreciation writeoffs? In idkyall's post, they mention the scenario of depreciating your property down to an effective value of $0 and then selling to buy another property to start again. You've argued that this only covers a fraction of your income. But at a basic level, if you get enough from the sale to buy a new property, then the old one must have been worth much more than $0 so one was wrong for decades about claimed depreciation ... right? In which case, it seems like it should be natural and fair to have to pay up on taxes from those previous years. If I can invest in real estate, rent it out for decades, and then sell it at a significant profit (which seems to be the case in many in-demand cities), then why should _any_ amount of that rental income get a to be balanced against imaginary depreciation?
- foota 4y ago
  What you describe does happen, unless they use that transfer process described, but by doing so they reduce the effective cost basis of the new property by the difference between the cost basis of the old one and the sale price.
  - rory 4y ago
    Yeah the 1031 exchange simply defers the tax to a later time. But if you defer it until you die, your heir (in many cases) gets off tax-free.
    - foota 4y ago
      Yeah, I guess the unintended? consequence here is that the lack of a time window allows indefinitely propagating it, maybe the exchange should come with a time window phase out.
rory 4y ago
You're skipping over the (extremely important) part where you take out a mortgage on property. So you buy the $500k property with $125k in cash and a $375k mortgage (25-30% down is typical for investment mortgages). Depreciation *plus mortgage interest expense* leads you to (for tax purposes) more or less break even on this investment after 10 years and so you pay no tax. After those 10 years are up, you've now paid off around $68k of the principal, plus the asset has gained $250k in value. So from your initial $125k of capital invested, you now have ~$400k in capital that you can leverage into a $1.6M property in a 1031 exchange. That bigger loan comes with a much larger mortgage interest expense, so you continue to earn no taxable income while growing a larger and larger asset and taking a (relatively modest) cash-on-cash return.
- fhrow4484 4y ago
  The mortgage interest deduction has a cap though, right? https://turbotax.intuit.com/tax-tips/home-ownership/deducting-mortgage-interest-faqs/L4a9KF9mI https://turbotax.intuit.com/tax-tips/home-ownership/deductin... seems to indicate there's a cap on the amount, as well as number of homes (only primary and secondary, not third, fourth etc) Or are people going around those caps somehow?
  - aorloff 4y ago
    The mortgage interest deduction is for your primary home. Investment property mortgage interest is a business expense
    - nly 4y ago
      It's wild to me that Americans can deduct mortgage interest from their tax bill ...
      - muti 4y ago
        New Zealand only recently passed a law that will phase out rental interest deductions over 4 years https://www.ird.govt.nz/pages/campaigns/interest-limitation-rules https://www.ird.govt.nz/pages/campaigns/interest-limitation-...
cannaceo 4y ago
Aside from a 1031 you can do what I do and take loans against the property to buy the next property. Keeps your tax basis lower. At least in LA county the appreciation is limited to 2% a year while the increase in property value has been 20%+ the last few years.
- sizzle 4y ago
  How many times can you do this until the banks will not entertain the Idea? Does this only work in a market where home prices only go up?
  - cannaceo 4y ago
    You can do this indefinitely with commercial real estate including multi-family dwellings. Lenders are comfortable with 50% loan-to-value. You do need to have some cash flow from the properties to service the debt. It does require the properties to either appreciate over time or for you to build up more equity in them by paying down your loan.
  - cannaceo 4y ago
    You can do this indefinitely with commercial real estate including multi-family dwellings. Lenders are comfortable with 50% loan-to-value. You do need to have some cash flow from the properties to service the debt. It does require the properties to either appreciate over time or for you to build up more equity in them by paying down your loan.
    - sizzle 4y ago
      Makes sense, thank you for spelling it out for me.
bps4484 4y ago
"Few rental properties will have under a 3.7% ROI" This is a leveraged investment (meaning you have a mortage). What that means is for your 20% down payment (the actual money you invest), that 3.7% writeoff on income can be an 18.5% cash on cash yield (ROI) in which you pay no taxes, ever. Few properties on the market can get you a better yield than that. If your ultimate yield is less than that you can roll those losses over year over year, so that then later if/when you get more yield you still* don't have to pay any taxes. It's a really big tax loophole and is the reason Donald Trump pays almost nothing in taxes (and he admitted as much in the presidential debate). *I own 3 properties in buffalo, one of the best rent to value markets in the US, and it's hard to find better yield than that even in that market. https://simplepassivecashflow.com/rv/ https://simplepassivecashflow.com/rv/
rr888 4y ago
> Depreciation is very fundamental to business tax law. I'm not sure how you'd "fix" that without penalizing non-rental companies for expanding. You can fix it by only deprecating the original cost. A person who buys a 50 year old house shouldn't be able to depreciate a second time, (then next owner again)
splitrocket 4y ago
Depreciation lower bound at current market value would do a lot here.

sbf501 4y ago

We need a third party to validate both of your claims, because I don't know where to start to understand who is right. This is an example of someone (me) who wants to understand the issue, but would need to google for days to understand both arguments.

deleted 4y ago
[deleted]
toss1 4y ago
The rebuttal by mminer237 is much closer to right [0]. Also it isn't even as good as mminer237 mentions, as many states also have a much lower exemption, and there is work in congress to get rid of the step-up in basis (a bad thing, imo) and to reduce the $12MM lifetime gift & estate exemption (a very good thing). So yes, there are some advantages, but OP is vastly exaggerating as if it is some freebie to landlords when it is not. There were some freebies introduced in the bills in the Trump term for the type of LLCs that Trump runs, but IDK if they were fixed in legislation in this term. If you want a general complaint, perhaps the angle is that capital is taxed much less than labor, under some notion that lower taxation is necessary to get people with capitol to actually deploy it in investments. I think that is provably false, and certainly does not require the level of tax code favoritism it currently enjoys. [0] source: tax & estate attny at biglaw firm in the household, although this is just from info absorbed by osmosis over years and is NOT a detailed legal analysis.
- sbf501 4y ago
  Thank you. > If you want a general complaint, perhaps the angle is that capital is taxed much less than labor, under some notion that lower taxation is necessary to get people with capitol to actually deploy it in investments. Yes, I recall when cap gains taxes dropped significantly during GWB and was, sadly, happy. Of course, I was just a dumb 20-something and didn't realize how much of boon to the wealthy it was.
  - robertlagrant 4y ago
    It's a boon to anyone whose job was created by it as well, and whose life was made cheaper by capital investments in automation and/or scale.
    - toss1 4y ago
      Yes, the question is how much of a boon it needs to be. The fact of the matter is that people with capital want to invest and grow that capital. It is absolutely false that if that activity is taxed, it will disappear. Just as obviously, if all capital gains are taxed at 100%, it will disappear. The question is the balance - how much to tax it so that the wealthy don't merely get wealthier at everyone elses' expense. It may also be a good idea to tax underutilized capital, as land is taxed.
      - robertlagrant 4y ago
        If you get all of that just right you may even extract enough money to pay for all the many governmental systems required to administrate it. Sadly none of that will have done anything as useful as an investment in a company that makes people's lives cheaper or better.
    - kelnos 4y ago
      Do we actually have strong evidence that these sorts of tax breaks actually stimulate this kind of economic activity to the degree where it's actually worth it? It... doesn't seem like we do? I mean, it's not like pre-1990 we had skyrocketing unemployment and underinvestment in business, and lowering capital gains taxes fixed it.

deleted 4y ago

[deleted]

deleted 4y ago

[deleted]

huevosabio 4y ago

You fix it by deprecating only the improved value. The land beneath a building does not deprecate, whereas the value of the building should. Since for most properties the majority of the value is in the land itself, your basis to deprecate would be much lower, and more realistic.

ouEight12 4y ago
> Since for most properties the majority of the value is in the land itself I'm not sure that's the case for the majority of the country. At-least it's not here in my greater metro area (suburbs or rural... yuppie downtown areas... perhaps, but again, downtown is not majority for most places)
- randomdata 4y ago
  It may be not true right now amid difficulty in finding labour and materials. Much like cars, the value of a used home is proportional to the cost of building a new home. When new homes are difficult to acquire, cost of used homes go up. Used cars have also increased in value lately for the same reason. This is not typical, however. These are normally depreciating assets. Under usual market conditions, houses are headed to being on the older side and reaching the end of their effective lifetime, leaving little value left in the structure. You can renovate a home to bring it back to new-like condition, which restores value to the structure, but that cost must be maintained in the equation.
- wizofaus 4y ago
  I'd think anywhere where apartments are viable to build it would be true, and of course large rural properties. Whether they make up "most properties" I'm not sure - it would surprise me if much less than half of properties in Australia were sitting on land worth more than the house itself (despite the enormous amount of undeveloped/low-value land we have!).
dbjacobs 4y ago
This is already the case. You can only depreciate the building value not the land portion. So single family homes have much lower depreciation since most of the value is typically in the land vs an apartment which is the opposite.

kaibee 4y ago

> I'm not sure how you'd "fix" that without penalizing non-rental companies for expanding. A land value tax would be a pretty straight forward solution to most of the issues around this.

pooper 4y ago
I think the only long term solution is a federal land and building tax. This is too important to leave to states (and definitely local) governments. A high tax with no credits, deductions, exemptions. Then, from this tax, we can pay "forward" every adult tax payer (not children, only adults) a fixed amount that pays the cost of an imaginary nationwide median cost of a two bedroom unit. Only adults, all adults, regardless of whether you have no child or eight children. Must file a federal income tax return to qualify. Median nationwide cost somehow calculated and weighted by population, hopefully updated more than once a decade. Everybody from Amazon.com to Walmart pays this land + building tax regardless of whether they are in Manhattan, New York or Deport, Texas. No exceptions.
djbebs 4y ago
Define land value.
- kelnos 4y ago
  This isn't hard: whatever a local assessor determines it to be, something they already have a lot of experience doing.
  - djbebs 4y ago
    So this is basically a "your tax is whatever I deem it to be"?
    - spiralx 4y ago
      Well yes but that's also the case with property taxes. A reasonable figure based on current market values seems simpler to calculate for unimproved land than it does for property tax, which includes the value of the unimproved land as well as everything else built or changed. And because it's the value of the _unimproved_ land it's based on, the value would be relatively stable over time as well as not varying much between one area and similar areas nearby, whereas property taxes are based on values that can change dramatically over time from one place to the next, which can lead to mis-valuations and general stress from constant changes.

happiness_idx 4y ago

As a home-owner not landlord (I am against the idea of owning more property than my family will use) I WISH I could write off half of my property tax.

JamesBarney 4y ago
I wish I could write off all my personal expenses as business expenses. But I understand why the laws are written such that I can't
- mindslight 4y ago
  I actually don't understand why the laws are written that way, apart from the political goal of causing W2 workers ("suckers") to bear a disproportionate tax burden. A W2 worker incurs expenses that are necessary to earn their income, including food, transportation, clothing, and healthcare. If they were able to account for these necessary expenses as a business does, the expenses would be directly deducted from income. And that's not even getting into the S-corp self-employment-tax dodge.
  - grog454 4y ago
    > If they were able to account for these necessary expenses as a business does, the expenses would be directly deducted from income. I thought that's mostly the point of the standard or itemized deduction (which businesses don't and shouldn't get).
    - mindslight 4y ago
      For one, no, those expenses aren't deductible even if you do itemize. They're considered "personal expenses" even though they were necessary to earn that W-2 income. If you buy a car and use it at least 50% to get to 1099 client(s) you can deduct that portion of it (including accelerated depreciation). But if your income is coming from W-2 job(s), you simply cannot. For two, the standard deduction is better seen as a personal exemption (which it subsumed), giving everyone a level of income that they don't have to pay tax on. Especially given that business expenses generally flow through as direct subtractions regardless of the standard deduction. There is definitely tension between allowing deductions to account for actual income fairly, and the resulting (de facto) requirement that everyone do minutiae accounting for their personal finances.

UncleOxidant 4y ago

A 1031 exchange also has to be completed within 45 days. That's pretty tight.

oogali 4y ago
Identify 3 candidate properties within 45 days. Close on one property within 180 days.

abeppu 4y ago

This is certainly not my area so I could be missing something basic. But after you sell a property, why shouldn't that force a reevaluation on past depreciation writeoffs? In idkyall's post, they mention the scenario of depreciating your property down to an effective value of $0 and then selling to buy another property to start again. You've argued that this only covers a fraction of your income. But at a basic level, if you get enough from the sale to buy a new property, then the old one must have been worth much more than $0 so one was wrong for decades about claimed depreciation ... right? In which case, it seems like it should be natural and fair to have to pay up on taxes from those previous years. If I can invest in real estate, rent it out for decades, and then sell it at a significant profit (which seems to be the case in many in-demand cities), then why should _any_ amount of that rental income get a to be balanced against imaginary depreciation?

foota 4y ago
What you describe does happen, unless they use that transfer process described, but by doing so they reduce the effective cost basis of the new property by the difference between the cost basis of the old one and the sale price.
- rory 4y ago
  Yeah the 1031 exchange simply defers the tax to a later time. But if you defer it until you die, your heir (in many cases) gets off tax-free.
  - foota 4y ago
    Yeah, I guess the unintended? consequence here is that the lack of a time window allows indefinitely propagating it, maybe the exchange should come with a time window phase out.

rory 4y ago

You're skipping over the (extremely important) part where you take out a mortgage on property. So you buy the $500k property with $125k in cash and a $375k mortgage (25-30% down is typical for investment mortgages). Depreciation *plus mortgage interest expense* leads you to (for tax purposes) more or less break even on this investment after 10 years and so you pay no tax. After those 10 years are up, you've now paid off around $68k of the principal, plus the asset has gained $250k in value. So from your initial $125k of capital invested, you now have ~$400k in capital that you can leverage into a $1.6M property in a 1031 exchange. That bigger loan comes with a much larger mortgage interest expense, so you continue to earn no taxable income while growing a larger and larger asset and taking a (relatively modest) cash-on-cash return.

fhrow4484 4y ago
The mortgage interest deduction has a cap though, right? https://turbotax.intuit.com/tax-tips/home-ownership/deducting-mortgage-interest-faqs/L4a9KF9mI https://turbotax.intuit.com/tax-tips/home-ownership/deductin... seems to indicate there's a cap on the amount, as well as number of homes (only primary and secondary, not third, fourth etc) Or are people going around those caps somehow?
- aorloff 4y ago
  The mortgage interest deduction is for your primary home. Investment property mortgage interest is a business expense
  - nly 4y ago
    It's wild to me that Americans can deduct mortgage interest from their tax bill ...
    - muti 4y ago
      New Zealand only recently passed a law that will phase out rental interest deductions over 4 years https://www.ird.govt.nz/pages/campaigns/interest-limitation-rules https://www.ird.govt.nz/pages/campaigns/interest-limitation-...

cannaceo 4y ago

Aside from a 1031 you can do what I do and take loans against the property to buy the next property. Keeps your tax basis lower. At least in LA county the appreciation is limited to 2% a year while the increase in property value has been 20%+ the last few years.

sizzle 4y ago
How many times can you do this until the banks will not entertain the Idea? Does this only work in a market where home prices only go up?
- cannaceo 4y ago
  You can do this indefinitely with commercial real estate including multi-family dwellings. Lenders are comfortable with 50% loan-to-value. You do need to have some cash flow from the properties to service the debt. It does require the properties to either appreciate over time or for you to build up more equity in them by paying down your loan.
- cannaceo 4y ago
  You can do this indefinitely with commercial real estate including multi-family dwellings. Lenders are comfortable with 50% loan-to-value. You do need to have some cash flow from the properties to service the debt. It does require the properties to either appreciate over time or for you to build up more equity in them by paying down your loan.
  - sizzle 4y ago
    Makes sense, thank you for spelling it out for me.

bps4484 4y ago

"Few rental properties will have under a 3.7% ROI" This is a leveraged investment (meaning you have a mortage). What that means is for your 20% down payment (the actual money you invest), that 3.7% writeoff on income can be an 18.5% cash on cash yield (ROI) in which you pay no taxes, ever. Few properties on the market can get you a better yield than that. If your ultimate yield is less than that you can roll those losses over year over year, so that then later if/when you get more yield you still* don't have to pay any taxes. It's a really big tax loophole and is the reason Donald Trump pays almost nothing in taxes (and he admitted as much in the presidential debate). *I own 3 properties in buffalo, one of the best rent to value markets in the US, and it's hard to find better yield than that even in that market. https://simplepassivecashflow.com/rv/ https://simplepassivecashflow.com/rv/

rr888 4y ago

> Depreciation is very fundamental to business tax law. I'm not sure how you'd "fix" that without penalizing non-rental companies for expanding. You can fix it by only deprecating the original cost. A person who buys a 50 year old house shouldn't be able to depreciate a second time, (then next owner again)

splitrocket 4y ago

Depreciation lower bound at current market value would do a lot here.