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To calculate depreciation on a residential property, you need to determine the property's cost basis and its useful life. The cost basis includes the purchase price of the property, closing costs, and any improvements made. Next, you divide the cost basis by the useful life of the property, which is typically 27.5 years for residential properties. This will give you the annual depreciation amount. Finally, you can deduct this depreciation expense from your rental income each year, reducing your
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