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01. This Book
02. Syndicate Boom
03. Get Information
04. Syndicator
05. How much?
06. Depreciation
07. Depreciation Applied
08. Declining Balance
09. Straight Line
10. Paying Taxes
11. Pay Mortgage
12. Income Taxes
13. Paper Loss
14. Tax Shelter
15. Rent?
16. Syndicator Units
17. Wear + Tear
18. Lease-Hold
19. Building
20. Comparison
21. Specialized Properties
22. Growth
23. Leverage
24. Share Growth
25. Why + How
26. Syndicate Agreement
27. Net Lease
28. Long-term Lease
29. No Guarantee
30. Inflation Clauses
31. "Inflation Clause" Works
32. Inflation Clause?
33. Mortgage Due
34. Interest Rates
35. Short Term Mortgage
36. Good Mortgages
37. Refinancing
38. Refinancing Clauses
39. Share of Mortgage
40. Share of Profit
41. Purchase Options
42. How Purchase Options
43. Stunt the Growth
44. "Subordination"
45. Long Term Lease
46. Business Organizations
47. Syndicate Debts?
48. Management
49. Your Consent?
50. Sell Your Unit
51. Investment Trust?
52. Business Syndicate
53. Multiple Properties
54. Dream or Reality?
55. Syndicator's Background
56. Value of Guarantees
57. Look for Yourself
58. Conclusion
Resources
17. Wear and Tear and Obsolescence
In previous chapters we examined the tax effects of depreciation. The major feature which we examined was, that every year you may keep some of the money which comes in without having to pay income taxes. To understand other aspects of depreciation we will forget about the syndicate for a moment. Think of your building or any property which you use in your own business. To the extent your building or your property wears out and depreciates in value because of such wear and tear you suffer a loss. The money set aside makes up for the loss. The building or property owned by the syndicate is subject to the same wear and tear as the building or property owned by you individually and has the same privileges with respect to depreciation reserves. You as an investor obtain your share of such depreciation allowance by distributions which are free from income taxes.
Depreciation is not only a tax feature. Uncle Sam gives you the tax benefits for good reasons. Equipment does wear out and does become obsolete. Buildings have a long useful life but do not last forever. You want to know how you are affected by all this. There are several answers. It is best to examine some illustrations.
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