“Amount representing a reasonable allowance for the exhaustion, wear, and tear of property arising out of its use or employment in the business,”
That only says when depreciation generally was added to the tax code. Everything that could be depreciated was not addded all at once; things were added and the rules for them added over time. And note it speaks to my point of the presumed philosophocal basis for “depreciation” - “exhaustion, wear, and tear of property [meaning capital property generally] arising out of its use” - which is fine if we are talking about how machinery and such which actually does depreciate in value with use, but that is NOT naturally what happens with real estate, unless it is not maintained or hits a down market - on paper. But that can be accounted for in determining gain or loss when the property is sold.
I understand why depreciation is a tax deduction on things that actually do depreciate in value - the item is gradually losing the value it was purchased for, and rather than just take a loss when the equipment is retired or sold, depreciation is allowed to be taken as a portion each year for a set number of years until the total LOSS “depreciation” is taken. But that natural proces of a declining real value is NOT what generally happens with real estate - thus there is no ACTUAL presumption that it is “depreciating” for real. Just a “on paper” gimmick in the tax code.
Original tax law required taxpayer to establish useful life for all assets. Real estate lives was often in dispute with irs. Reagan’s changes established set lives that were not based on useful life.