Rental Property Depreciation Calculator

Work out your annual depreciation deduction and the full schedule. Everything runs in your browser; nothing is uploaded.

Property

Purchase price ($)

Land value (% of price)

Capitalized closing costs ($)

Capital improvements ($)

Timing & tax

Month placed in service (1-12)

Year placed in service

Recovery period (years)

Your marginal tax rate (%)

Results

Depreciable basis

Annual depreciation (full year)

First-year depreciation

Est. annual tax savings

Year	Depreciation	Remaining basis

How rental depreciation works

Residential rental buildings in the US are depreciated straight-line over 27.5 years (commercial: 39 years). Land never depreciates, so first remove the land value: depreciable basis = (price × (1 − land %)) + capitalized closing costs + improvements. Annual depreciation = basis ÷ 27.5.

Mid-month convention

Residential property is treated as placed in service in the middle of its month. A property placed in service in January gets 11.5 months of depreciation in year one; one placed in service in December gets 0.5 months. The schedule continues until the basis is fully used, so the schedule spans 28 or 29 calendar years.

Recapture

When you sell, depreciation taken is generally taxed as unrecaptured Section 1250 gain (up to 25%) — see the 1031 exchange calculator for deferring it.

FAQ

How do I find the land value?

Use your county assessor's land-to-improvement ratio, an appraisal, or insurance replacement cost. 20–30% is a common rough figure but varies widely.

Can I depreciate closing costs?

Many acquisition costs (title, recording, legal fees) are added to basis; loan costs are amortized separately. Ask your tax advisor.

What is the mid-month convention?

A rule that treats property as placed in service mid-month, so the first and last years are partial.

Do I have to take depreciation?

Depreciation is 'allowed or allowable' — it reduces your basis at sale whether or not you claimed it.