<prompt> Human: I heard that it was you could depreciate the building over 27.5 years at least in chicago, so every year you could write off your taxes 127.5 or 3.6 of that buildings initial value at acquisition. If your the principal owner in that buildings investment, you write a pretty good amount off youre taxes, especially if youre in the higher tax brackets 35-39. And because you expect the value of the property overtime will naturally increase, and by the time your differed depreciation is finally collected, theres a sizable difference in something?idkIm not sure though. Can someone try to explain it better?  <response>: There are classic tax deferral opportunities on real estate. Generally you can buy and hold it for a very long time if you want to keep deferring the gain. You can borrow against the value of the appreciation tax free without selling. When you die you get a step up on the cost basis to fair market value. You can also use like kind exchanges to trade one piece of real estate for another without triggering tax. 