Definition Of Excess Depreciation In Real Estate

Definition of "Excess depreciation"

Brittany P. Shakespeare, Real Estate Agent Sterling Property Management Inc.

Costs taken over an above what one is entitled to. This can occur either by claiming depreciation costs exceeding actual depreciable value or by depreciating items that cannot be depreciated. Items that cannot be depreciated include land, since it never wears out, inventory, containers, costs to demolish a building, a life interest or an interest for a term of years in a property, or income interest in a trust.