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What is rental depreciation and how does it differ from an expense?

SOLVEDby TurboTax1084Updated December 17, 2021

Depreciation lets you deduct the "used up" part of an asset's cost year after year, until the entire cost is used up or you no longer own it. It provides for wear and tear or obsolescence of the property or asset.

Depreciation deducts the asset's cost over time rather than deducting it all at once, as you would when deducting an expense.

Rental property is considered a depreciable asset, as are major improvements such as new roofs, landscaping, refrigerators, water heaters, furniture, and so forth.

Expenses are used to deduct the entire cost of services, utilities, fees, and consumable items (like cleaning supplies, light bulbs, smoke alarms, and batteries).

TurboTax Premier, TurboTax Live Premier, TurboTax Self-Employed, and TurboTax Self-Employed Live (and Home & Business if you're using TurboTax CD/Download) will help you handle the ins and outs of depreciation. We'll even figure out which depreciation method gives you the biggest tax break, based on your particular situation.

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