How is depreciation calculated?
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[{"id": "fj579xm", "text": "You only depreciate your tax basis, which is going to be your cost. You allocate the cost between the land and improvements,  usually based on the assessor's values, and then you depreciate the portion allocated to the improvements. \n\nYou don't get to mark up the depreciable basis as the market value goes up.", "replies": [], "depth": 1}, {"id": "fj5bzgo", "text": "To add to this, you CAN increase the basis if you are capitalizing improvements. If you put say $100k in improvements that you can\u2019t expense as repairs &amp; maintenance, then it would go into your tax basis and increase your depreciation. Obviously it\u2019s preferred to expense as repairs &amp; maintenance since you get to write off 100% of it at once, but you can\u2019t always do that depending on the nature of the work.", "replies": [], "depth": 1}]