Report on an actual basis

You maintain a full set of business financial statements: balance sheet, income statement, and tax return. Taxable income is calculated as revenue minus actual expenses and depreciation.

The property—excluding land—and the furnishings are depreciated for accounting purposes each year. This depreciation is a deductible expense that does not involve any cash outflow. This is what makes it possible, in many situations, to generate after-tax income for years.

Depreciation cannot result in a deficit: any excess amount may be carried forward to subsequent fiscal years without any time limit.

• A certified public accountant or a specialized online accounting service
• The systematic retention of all supporting documents
• One thing to keep in mind: the tax return package takes time to prepare; it can't be thrown together in May

• Since the passage of the 2025 Finance Act, depreciation deductions are now included in the calculation of capital gains upon the resale of the property. The tax benefit of the “réel” regime is therefore no longer permanent: it is partially deferred. This trade-off between immediate gains and taxation upon disposal should be discussed with a tax advisor before choosing a tax regime.
• The transition from reality to the microphone is guided. Don't treat reality as a test.
• Accounting fees are themselves tax-deductible, which reduces the actual cost of the plan.