Tips and definitions: Vacation home purchase scenario

• Depreciation applies only to the building -- not to land
  (the program could, but does not bother, with depreciating appliances etc.)
• The depreciation you can deduct, like other costs, is a pro-rated fraction of total depreciation. That is, you can only treat depreciation as an expense only for the time period during which the property is being used as a rental.

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