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Depreciable Improvements
Useful Links > Glossary > Depreciable Improvements
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Depreciable Improvements
Real estate can be divided into land and improvements. A certain percentage of the value of the real estate is due to the value of the land, while the remaining value is due to the improvements. The term improvement is a generic term that can refer to a house or other structure that is physically attached to the land. The % Value of Improvements is the percentage of the real estate's value due to the improvements. Depreciable improvements are the actual value of the structure, which can be depreciated. The depreciable improvements term is calculated by multiplying the % value of improvements with the purchase price. Always consult a tax professional with issues involving taxes. (see value of improvements)

Calculation
Depreciable improvements = % Value of Improvements * Purchase Price

Example
In this example, the value of the improvements represents 60% of the $450,000 purchase price.
Depreciable improvements = 0.60 * $450,000
Depreciable improvements = $270,000

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