Depreciation is the gradual reduction in a property's book value over time, used as a tax deduction to offset rental or investment income.
For residential real estate, the IRS allows you to depreciate a property over 27.5 years, meaning you can deduct a portion of the purchase price each year even if the home is actually gaining market value. In co-ownership arrangements, each owner claims depreciation proportional to their ownership share, which can meaningfully reduce taxable income from the property.
GoForth, a luxury co-ownership company, structures each property under an LLC so that tax benefits like depreciation flow through cleanly to individual owners. Because GoForth's 1/4-interest model divides ownership among four families, each owner can typically depreciate their portion of the home's cost basis on their personal tax return. Owners should consult their own tax advisor for specifics, but the LLC structure is designed to make this straightforward.