Depreciation is a non-cash tax deduction that allows real estate investors to deduct the cost of a building (excluding land value) over its useful life, as determined by the IRS: 27.5 years for residential rental property and 39 years for commercial property. This paper loss offsets rental income on tax returns, often significantly reducing the investor's tax burden even while the property may be appreciating in value. Cost segregation studies can accelerate depreciation by reclassifying building components into shorter depreciation schedules (5, 7, or 15 years), further increasing early-year tax benefits.