Business Glossary

realty that is subject to deductions for depreciation . It generally includes property used in a trade or business, or an investment, subject to an allowance for depreciation under section 167 of the Internal Revenue Code .

Example: Abel buys an apartment complex for $1 million. Of the purchase price, $100,000 is the value of the land, the remaining $900,000 is the value of depreciable real estate. Abel uses the straight-line depreciation method and a 27½-year remaining depreciable life.