What Is Cost Recovery (Depreciation Deduction)?

In a tax context, cost recovery is the process of deducting a rental property's cost over its IRS-defined useful life (27.5 years for residential rental property, 39 for commercial) as an annual depreciation expense — distinct from renovation cost recovery, which measures how much of a remodel's cost comes back as added resale value.

Most useful for: Commercial Investor
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Cost Recovery
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