Rental Property Depreciation Calculator
Estimate your annual depreciation deduction using the IRS MACRS straight-line method for residential (27.5 years) and commercial (39 years) rental property.
Inputs
Land is not depreciable, so it's excluded from the cost basis.
Results
Depreciable basis
$320,000.00
Annual depreciation
$11,636.36
Monthly
$969.70
First year (mid-month)
$11,151.52
How it works
The IRS lets rental property owners recover the cost of the building (not the land) over a fixed useful life under MACRS straight-line depreciation. Residential rentals use 27.5 years; commercial property uses 39 years. Divide the depreciable basis by the useful life to get the annual deduction.
Why land is excluded
Land doesn't wear out, so the IRS treats it as non-depreciable. You subtract the land's value (use your county assessor's land-to-improvement ratio, or an appraisal) from the purchase price to find the depreciable basis of the building.
The mid-month convention
For real property, the IRS assumes you placed the property in service in the middle of the month — regardless of the actual day. A property bought on January 3rd and one bought on January 28th both get 11.5 months of depreciation in year one.
This calculator is an estimate for planning purposes only. Confirm depreciation, land allocation, and Section 1250 recapture with a licensed tax professional.
