What is the method of deducting the cost of a property in equal annual installments called?

The method of deducting the cost of a property in equal annual installments is known as straight-line depreciation. This approach allocates the cost of the asset evenly over its useful life, making it easy to calculate annual expense deductions for a property.

For instance, if a property is purchased for $100,000 and has an estimated useful life of 20 years, the straight-line depreciation would involve deducting $5,000 each year from the property's taxable income. This consistent annual deduction simplifies financial forecasting and tax planning.

Other methods, such as accelerated depreciation or declining balance depreciation, may allow for larger deductions in the earlier years of an asset's life, but they do not involve equal annual installments. Linear depreciation is often used interchangeably with straight-line depreciation in some contexts, but it's less precise regarding formal financial terminology. Therefore, straight-line depreciation is the most accurate term for this process.