If a taxpayer has multiple properties, how must they treat depreciation for tax purposes?

For tax purposes, each property owned by a taxpayer can be depreciated separately. This means that a taxpayer must calculate and report the depreciation for each individual property they own, reflecting the specific value, useful life, and any improvements made to that property. This treatment allows taxpayers to maximize their deductions by accurately recognizing the depreciation associated with each asset, which is particularly important given that properties may have varying purchase prices, conditions, and types of improvements.

Separately depreciating each property ensures that taxpayers account for the unique circumstances of each investment. This approach is vital for accurately reporting income and expenses on tax returns, ultimately leading to a correct tax liability calculation.