What Is a General Depreciation System?

​Frank Roessler is a an experienced real estate investor who holds an MBA from the UCLA Anderson School of Management. Currently, Frank Roessler applies his skills in real estate as the managing principal and founder of Ashcroft Capital (additional information is available at www.ashcroftcapital.com/about/frank-roessler). 

Ashcroft Capitol, a real estate investment firm in Westwood, California, focuses on the acquisition of multifamily housing in United States urban areas. Multifamily housing is a form of residential real estate that is often purchased by investors, who typically apply a depreciation method to the property with regard to tax liabilities and deductions. Depreciation refers to the accounting process that lowers the value of an asset over time, with this loss in value being written off against income. 

The modified accelerated cost recovery system (MACRS) schedule for depreciation is often used by residential real estate owners. The most common form of depreciation under MACRS is the General Depreciation System (GDS). A declining balance method, GDS involves applying the rate of depreciation to the property’s remaining value that has not yet been depreciated. Under GDS, large amounts are depreciated in the initial years of a real estate investment. These amounts then decrease each year as the non-depreciated balance decreases.

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