Rental Property Depreciation Calculator

This rental depreciation calculator runs the standard straight line schedule the IRS expects on US rental property: 27.5 years for residential, 39 years for commercial, land carved out because land never depreciates, and the mid month convention applied so the first and last years are partial. Enter the purchase price, the land value (as dollars or a percentage), any improvements, the month and year you placed the property in service, and the property type. You get the depreciable basis, the annual deduction, the smaller first year deduction, the full year by year schedule, accumulated depreciation to date, and an estimate of depreciation recapture when you sell.

I built this after doing my own first year by hand and getting it wrong by roughly a third, because I forgot that a property placed in service in September only gets three and a half months of deduction, not four. The calculator runs entirely in your browser, so your basis and purchase details are never uploaded anywhere. It is arithmetic on your assumptions, not tax advice, and a CPA should confirm anything that actually goes on your return.

How to use

1. Enter the total purchase price of the property, not including loan costs or prepaid escrows.
2. Enter the land value in dollars, or switch to percentage mode if you only have a rough split from the county assessor.
3. Add any capital improvements folded into the basis, such as a roof or an addition finished before the property was placed in service.
4. Choose the property type: residential rental for 27.5 years, or commercial and other non residential for 39 years.
5. Pick the month and year the property was placed in service, meaning ready and available to rent, not the day you closed.
6. Read the depreciable basis, first year deduction and full annual deduction, then scroll the schedule year by year.
7. Check the recapture estimate at the bottom to see what deferred tax is building up behind those deductions.

Why use our rental property depreciation calculator?

The land split is where most people go wrong, and it is the number I got wrong first. Land is never depreciable, so every dollar you assign to it is a dollar of deduction you give up, and every dollar you wrongly assign to the building is a deduction the IRS can disallow later. Most people use the ratio from their county assessor's card because it is documented and defensible, and this tool takes either a dollar figure or a percentage so you can test how much the split moves your deduction.

The mid month convention is applied properly rather than dividing by twelve. The rule treats a property as placed in service in the middle of whatever month it became available to rent, so a September start earns three and a half months of depreciation in year one, and the tail shows up as a partial final year.

Showing recapture alongside the deduction is the honest part. Depreciation is not free money, it is a timing shift: the deductions you take reduce your basis, and when you sell, that amount comes back as unrecaptured Section 1250 gain taxed at up to 25 percent rather than the lower long term capital gains rate. Worth knowing before you assume the deduction is pure profit. The IRS covers the 25 percent rate in Topic 409.

What this tool does not do matters as much as what it does. No cost segregation study, no bonus depreciation, no Section 179, no partial year dispositions, and no passive activity loss limits, which are the rules that often stop paper losses from offsetting your salary. Those are situational, and pretending a free web calculator can settle them would be dishonest. What you get here is the clean straight line baseline everything else is measured against.

Nothing is uploaded. Your purchase price, your basis and your dates stay in the browser tab, which is exactly how I would want my own numbers handled.

Who is this tool for?

Estimating your annual deduction before tax season is the main reason people land here. You know roughly what the rental earned, and you want to see how much of that income the deduction quietly absorbs. Pair it with the rental property calculator to compare the cash flow you feel with the taxable income you report, because they are rarely the same number.

Checking a preparer's work is a use I like more. If your return comes back with a depreciation figure that looks nothing like the straight line math, this gives you an informed question to ask rather than a vague worry. Sometimes there is a good reason, and sometimes a date or a land split was entered wrong.

Planning a sale is the third use, and the one people delay too long. Run accumulated depreciation to date, see the recapture estimate, and then decide whether you want that bill now or deferred. If deferral is the goal, the 1031 exchange calculator models the exchange path, and the seller net proceeds calculator shows what actually lands in your account after costs.

Short term rental owners use it too, since a nightly rental still sits on a depreciation schedule and the property type question can get subtle. Model the income side in the Airbnb calculator and let this one handle the basis, but get a professional opinion on the recovery period before you file.

Frequently asked questions