Cash Flow from Depreciation™

Additional effective cash flow generated by depreciation tax savings.

Example Result

Sample Data

$2,688

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Cash Flow from Depreciation™ Formula

Depreciation x Tax Rate

$11,200 x 24.00%

$2,688

What This Means

A sample property priced at $385,000 with $2,850/month rent has a cash flow from depreciation™ of $2,688 at Purchase (Month 0). This shows the cash flow impact of depreciation. If your property generates $4,000 in pre-tax cash flow and depreciation saves $2,688 in taxes, your effective cash benefit is much higher than it appears.

Where This Value Comes From

Cash Flow from Depreciation™ is not entered directly — it is calculated from Depreciation and Income Tax Rate. See the formula breakdown above and the detailed inputs below.

Inputs That Determine Cash Flow from Depreciation™

Depreciation

Annual straight-line depreciation deduction for the building.

$11,200

Purchase

Income Tax Rate

Your marginal income tax rate applied to rental income.

Found on your tax return

24.00%

Purchase

Calculations That Use Cash Flow from Depreciation™

Debt Paydown Breakeven Rent

Breakeven

$2,497

Purchase

Self-Managed Breakeven Rent

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Why It Matters

This shows the cash flow impact of depreciation. If your property generates $4,000 in pre-tax cash flow and depreciation saves $2,688 in taxes, your effective cash benefit is much higher than it appears.

Detailed Explanation

The cash flow benefit from depreciation tax savings. This equals the tax savings from depreciation and represents additional effective income generated by the tax deduction.