Why do we get depreciation on rental real estate?

I get this question often about what depreciation is and why would you get a depreciation deduction when the value of real estate is actually going up over time. I think it's a great question and I have an answer for you. There is undoubtedly additional explanation here, but in the spirit of simplicity, here is a brief explanation:

1. The property that was purchased and that's being used for income production is being used by a renter, so there is wear and tear on the property which will result in substantial repairs at some point in the future. These are things such as a roof, expensive appliances, painting, flooring, siding, etc. Just like when these things came with the original purchase of the house, you don't write them off at once; the cost is spread out over 27.5 years through depreciation. Therefore, in a nutshell depreciation is an estimate of the cost of wear and tear on the property that will eventually result in significant repairs or replacement of worn-out aspects of the property.

To circle back to the original question regarding depreciating an appreciating asset - something of note: you don't get to depreciate a property that's not being used either for rental income or for business purposes. In that case, the wear and tear on the appreciating asset isn't recognized as a tax deduction.