Myself I am a Senior Engineer in one of the worlds largest conglomerates. I have a BA in Finance and a BS in Comp Sci. Been a long time since my accounting years and I made a few mistakes in this thread simply because I don't take the time to go back and look it all up. But you didn't notice them anyway. You see depreciation as a deserved write off. I see it as a long standing accounting gimmic that rips off the taxpayer. But then I am for a flat tax no deductions. In your case that would mean you buy your houses using your dime and rent them out. That's it. You are taxed on the rents. Expenses are your problem not the taxpayers. A truly free market. You can do what you want as long as the taxpayer isn't funding it. Radical idea. Right now I'm listening to MCKenna talking about people gaming the system. That's what has happened with deductions. A colossal gaming of the system. What you do.