Free tool
Rental property depreciation calculator
Residential rental property depreciates over 27.5 years, straight-line, using the IRS mid-month convention. Enter your numbers for the annual deduction and a year-by-year schedule.
First year is prorated by the mid-month convention: it counts a half-month in the month placed in service.
Educational estimate for residential real property (27.5-yr straight line, mid-month), not tax advice. Appliances, carpet, furniture, and land improvements use different (MACRS) schedules. Confirm with your CPA. For benchmark tables of what the deduction saves by property value, bracket, and land share, see the depreciation data.
Year-by-year schedule
| Year | Depreciation | Accumulated | Remaining basis |
|---|
How residential depreciation works
You depreciate the building, never the land, so the first move is splitting your cost basis into land vs. structure (the county assessor’s ratio is the common shortcut). The building portion is written off evenly over 27.5 years. For the full step-by-step method, including what belongs in basis, see how to calculate depreciation on a rental property.
The mid-month convention means the IRS treats property as placed in service in the middle of that month, so your first and final years are partial. That is why the year-one number above is smaller than the full-year amount.
Renovations and improvements get their own clock
A new roof, an HVAC system, an addition, or a gut remodel is not a repair you deduct this year, it is a capital improvement with its own basis and its own fresh 27.5-year schedule, starting the month it is placed in service. So a property that has depreciated for six years can easily have three or four separate schedules running at once. A routine repair, by contrast, is deducted in full the year you pay it, see repairs vs. improvements for which side of the line a cost falls on.
What depreciates faster than 27.5 years
Not everything rides the 27.5-year track. Pulling these out of the building is the heart of a cost-segregation study, which front-loads deductions:
- 5–7 years (MACRS): appliances, carpet, and furniture.
- 15 years: land improvements like fences, driveways, and landscaping.
- 27.5 years: the building itself and most structural improvements (what this calculator models).
- Never: the land, and your own labor.
The full asset-by-asset table, including the items that surprise landlords (a 20-year roof depreciates over 27.5 years, a 15-year refrigerator over 5), is in how long to depreciate every rental asset. And since July 2025, everything on those fast clocks qualifies for 100% bonus depreciation, permanently: the full cost in year one instead of the schedule. The building this calculator models stays on its 27.5 years either way. For the official class lives, IRS Publication 946 is the reference, and Publication 527 covers residential rental property specifically.
The bill at sale: depreciation recapture
Depreciation is a timing strategy, not free money. Every dollar you depreciate lowers your cost basis, so when you sell, your taxable gain is larger by exactly the depreciation you took, and that slice is taxed as unrecaptured Section 1250 gain at up to 25%, separate from the capital-gains rate on appreciation (the full exit-side math is in how recapture is calculated). The Accumulated column above is the number that comes back at sale. A 1031 exchange defers both the recapture and the gain, and suspended passive losses released at sale often offset a chunk of it, model it with the sell vs. hold vs. 1031 calculator before you list. None of this means skip depreciation: the IRS taxes the depreciation you were allowed to take whether you claimed it or not, so the move is always to claim it and plan the sale. That paper deduction is also what lets many landlords pay little or no tax on rental income in the holding years.
Frequently asked questions
How do you calculate depreciation on a rental property?
Split the purchase price into land and building, depreciate only the building over 27.5 years straight-line (for example $250,000 divided by 27.5 is $9,091 a year), and prorate the first and final years with the mid-month convention. The four inputs are all you need: purchase price, land value, the month it was placed in service, and any improvements on their own clocks.
How much of a rental property can you depreciate?
Only the building, never the land. Carve the land value out of your basis first (the county assessor's land-to-building ratio is the common shortcut), then depreciate the building portion over 27.5 years. On a $300,000 property with $50,000 of land you depreciate the $250,000 building, about $9,091 a year for 27.5 years.
How much is depreciation recapture when I sell?
Every dollar you depreciate lowers your cost basis, so it raises your taxable gain by the same amount when you sell. That slice is taxed as unrecaptured Section 1250 gain at up to 25%, separate from the capital-gains rate on appreciation. The 'Accumulated' column in the schedule above is exactly the number that comes back at sale. A 1031 exchange defers it; a step-up at death erases it.
Can I depreciate a renovation or remodel?
Yes, but a capital improvement (a new roof, HVAC, an addition, a gut remodel) is not deducted this year, it starts its own 27.5-year schedule the month it is placed in service. A property that has depreciated for six years can have three or four separate schedules running at once. A routine repair, by contrast, is deducted in full the year you pay it.
How do I depreciate furniture and appliances?
Not on the 27.5-year track. Appliances, carpet, and furniture use a faster 5-to-7-year MACRS schedule, and land improvements like fences and driveways use 15 years. Pulling these out of the building to depreciate them faster is the heart of a cost-segregation study. This calculator models the 27.5-year building only; the faster classes are separate schedules.
How do I track depreciation across multiple years and improvements?
That is the hard part, not the math. The IRS expects the same numbers carried forward consistently and recapture ready at sale, and each improvement is its own schedule with its own start date. A spreadsheet works for one property; across several, with improvements landing in different years, it is exactly the kind of running ledger the Oberlin24 AI keeps straight in the background.