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Path: utzoo!watmath!clyde!akgua!rjb
From: rjb@akgua.UUCP (R.J. Brown [Bob])
Newsgroups: net.politics
Subject: Re: Flat Tax
Message-ID: <720@akgua.UUCP>
Date: Thu, 19-Apr-84 07:55:01 EST
Article-I.D.: akgua.720
Posted: Thu Apr 19 07:55:01 1984
Date-Received: Fri, 20-Apr-84 01:06:14 EST
References: <435@burl.UUCP>
Organization: AT&T Technologies, Atlanta
Lines: 17


When you depreciate an appreciating asset (like a house)
the taxman recovers that depreciation because it is added
to the total capital gain (Selling Price - Original Purchase Price).
For most investors the whole wad is taxed as a long term (held more
than 1 yr) capital gain.  This means 40% of the gain is taxed as
ordinary income.  As you can see this is a tax deferral with a nice
sweetener since your depreciation expense is deductible year by year
off your income while you only "give back" 40% of that depreciation
as taxable income some time down the road.


Bob Brown {...clyde!akgua!rjb}
AT&T Technologies, Inc.............. Norcross, Ga
(404) 447-3784 ...  Cornet 583-3784