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What Is A Rental Property Depreciation Limit?

If you own a rental property, here's what you need to know about rental property depreciation before filing your next tax return.

    Erica Seppala
  • Last updated onUpdated

  • Shelli Woodward
  • REVIEWED BY

    Shelli Woodward

    Finance Director

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Key Takeaways
  1. Rental property owners can depreciate their property over 27.5 years using the Modified Accelerated Cost Recovery System (MACRS), which allows for a yearly deduction of a percentage of the property’s cost basis (excluding land).
  2. Property owners can use cost segregation to categorize and depreciate certain assets over a shorter period (5, 7, or 15 years), potentially reducing tax liability and even resulting in tax refunds by front-loading depreciation.
Erica Seppala

Erica Seppala

Editor & Senior Staff Writer at Merchant Maverick
Erica began writing on small business topics in 2008. She joined Merchant Maverick in 2018 and focuses on loans, accounting, and POS. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll. She has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a graduate of Limestone University and resides in Greenville, South Carolina.
Erica Seppala
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