Byrne Hobart is a New Yorker with widely, perhaps even bizarrely varied interests. Among the true pros of owning rental income property is that real estate investors can depreciate the property and enjoy the positive cash flow resulting from writing off the tax depreciation just amongst the tax shelter benefits associated with real estate investing. Here’s how it works. They permit income property owners to take a deduction for that presumed decline through the depreciation deduction, that in turn helps the investor shelter rental income that is subject to ordinary income rates.
The tax code assumes that the investment property buildings are wearing out over time and therefore becoming less valuable.