Why would an owner want to depreciate a rental property?
I am studying Real Estate materials, and I just learned that a person who flips to many houses can be considered a dealer. Once a person is considered a dealer, he/she won’t be able to depreciate any of their rental properties. Why would a person want to depreciate a rental property?
Tax Breaks!!!!!!!!!!!!
You would get a larger tax write off by depreciating a rental property. It make sense if you plan to hold the property for a long time.
If a person is a dealer, he probably is not holding it to rent. He is holding to sell immediately. If a person rents, they want to recover the cost of the property via depreciation to reduce the taxes.