REAL ESTATE INVESTMENT

There are many different type of investment real estate: rental houses, apartments, commercial buildings, industrial, etc.

The IRS requires real estate investors to depreciate their investment properties. Depreciation is the "paper loss" required for the estimated wear and tear on a property. However, land value is not depreciable.

Residential income property is depreciated over 27.5 years on a straight-line basis. Commercial property is depreciated over 39 years, also on a straight-line basis.