Basis & Depreciation · November 30, 2026

Depreciation, Amortization, and Cost Basis

The bookkeeping underneath every real estate tax benefit: what a property counts as costing you, how that cost is written off, and what happens to it at sale.

Written for readers 16 and older. No tax background required.

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In this installment

All topics

016 min read

What Cost Basis Is

The number every other real estate tax rule is built on.

025 min read

Splitting Land From Building

Only one half of what you bought can be depreciated.

036 min read

How Depreciation Works

Writing off a building a slice at a time.

046 min read

Repairs, Improvements, and Adjusted Basis

Deduct it now or add it to the building — the rules decide, not you.

055 min read

Amortization: The Other Slow Write-Off

Not everything spread over years is depreciation.

066 min read

Speeding It Up: Components, Bonus, and Section 179

Some of a building is not really a building.

076 min read

Recapture: Settling Up at Sale

The deductions come back to the table when you sell.

086 min read

Basis You Did Not Pay For

Inheritance, gifts, and turning a home into a rental.

095 min read

The Truth About Deducting Lease Payments

Yes, you can deduct the lease — but only the business part.

106 min read

Can a Plane Be a Tax Deduction?

Sometimes — and it is one of the most audited answers in the code.

For advanced readers

The basis ledger: one number, thirty years

Advanced owners keep a single running ledger per property from the day of purchase. It opens with the price plus capitalized closing costs, records the supported land and building split, and then tracks three columns forever: improvements added, depreciation claimed by schedule, and amortized loan costs by loan. When a cost segregation study runs, the components go in as their own lines rather than disappearing into the shell. When a refinance happens, the old loan's unamortized balance is released and the new one opens a schedule. When a 1031 exchange occurs, the deferred gain and carried-over depreciation move into the replacement property's opening entry instead of resetting. Thirty years later that ledger is what determines the tax on the sale to the dollar — and it is why the owners who win at the exit are the ones who did the bookkeeping at the entrance.

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