Using Depreciation to Maximize Tax Savings

Depreciation can be an investor's best friend when it comes to tax savings. We take a tax deduction on our rental properties when we may not have suffered any actual loss on property. Land, on the other hand, is not depreciable. For example, if megan and james purchased a duplex for 500 thousand dollars that was made up of 75 thousand dollars of land and 425 thousand dollars of building they could save close to seven thousand dollars in taxes each year.