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Rental Property Depreciation Calculator
Estimate depreciable basis, first-year depreciation, potential tax savings, and every annual deduction across a downloadable 27.5-year schedule.
Property tax basis
Rental use and timing
Estimated GDS deduction
$5,023 in year one
Depreciable basis
$255,000
Land excluded
$60,000
First-year depreciation
$5,023
First-year recovery period
6.5 months
Full-year depreciation
$9,273
Monthly equivalent
$773
Est. first-year tax savings
$1,205
Est. full-year tax savings
$2,225
This planning estimate covers U.S. residential rental buildings under 27.5-year GDS straight-line depreciation. It does not model cost segregation, bonus depreciation, personal property, conversion-basis rules, passive-loss limits, depreciation recapture, or a sale. Confirm tax treatment with a qualified tax professional.
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Annual depreciation schedule
Follow the estimated building deduction and remaining depreciable basis across the complete 27.5-year recovery period.
| Recovery year | Months | Depreciation | Remaining basis |
|---|---|---|---|
| Year 1 | 6.5 | $5,023 | $249,977 |
| Year 2 | 12 | $9,273 | $240,705 |
| Year 3 | 12 | $9,273 | $231,432 |
| Year 4 | 12 | $9,273 | $222,159 |
| Year 5 | 12 | $9,273 | $212,886 |
| Year 6 | 12 | $9,273 | $203,614 |
| Year 7 | 12 | $9,273 | $194,341 |
| Year 8 | 12 | $9,273 | $185,068 |
| Year 9 | 12 | $9,273 | $175,795 |
| Year 10 | 12 | $9,273 | $166,523 |
| Year 11 | 12 | $9,273 | $157,250 |
| Year 12 | 12 | $9,273 | $147,977 |
| Year 13 | 12 | $9,273 | $138,705 |
| Year 14 | 12 | $9,273 | $129,432 |
| Year 15 | 12 | $9,273 | $120,159 |
| Year 16 | 12 | $9,273 | $110,886 |
| Year 17 | 12 | $9,273 | $101,614 |
| Year 18 | 12 | $9,273 | $92,341 |
| Year 19 | 12 | $9,273 | $83,068 |
| Year 20 | 12 | $9,273 | $73,795 |
| Year 21 | 12 | $9,273 | $64,523 |
| Year 22 | 12 | $9,273 | $55,250 |
| Year 23 | 12 | $9,273 | $45,977 |
| Year 24 | 12 | $9,273 | $36,705 |
| Year 25 | 12 | $9,273 | $27,432 |
| Year 26 | 12 | $9,273 | $18,159 |
| Year 27 | 12 | $9,273 | $8,886 |
| Year 28 | 11.5 | $8,886 | $0 |
The schedule uses exact straight-line half-month periods and rounds displayed amounts. Published IRS percentage tables round rates, so a table-based result can differ slightly. A sale, later improvement, or change in use requires a separate calculation.
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What this rental depreciation calculator estimates
This calculator estimates U.S. federal depreciation for residential rental buildings placed in service after 1986 using the common MACRS General Depreciation System: straight-line depreciation over 27.5 years with the mid-month convention. Read the rental property depreciation guide for the formula and a worked example.
Rental property depreciation formula
Depreciable basis equals purchase price minus land value, plus the building-allocable part of eligible basis costs and pre-service capital improvements, multiplied by the rental-use percentage. Full-year depreciation is depreciable basis divided by 27.5.
The first year uses the mid-month convention. A property placed in service in June receives 6.5 months of depreciation that year; a December property receives 0.5 month.
Why land is excluded
Land does not wear out in the same way as a building and is not depreciable. Allocate a supportable part of the property basis to land using records such as assessed values or an appraisal. The calculator subtracts that amount before applying the rental-use percentage.
Placed in service is not always the purchase date
Depreciation generally begins when the property is ready and available for rent. A renovation period can make the placed-in-service date later than closing. Improvements added later may need their own depreciation schedule rather than being combined with the building in this simple estimate.
Federal rules used in this estimate
Reviewed July 18, 2026. The 27.5-year GDS recovery period, straight-line method, land exclusion, and mid-month convention are based on current IRS Publication 527. The annual schedule follows the residential rental pattern in IRS Publication 946, Table A-6. Tax rules and individual circumstances can change, so verify the estimate before filing.
How the 27.5-year depreciation schedule works
The first recovery year includes a partial deduction based on the placed-in-service month. Full recovery years generally include 12 months, and the final year completes the remaining half-month periods. The calculator shows each annual deduction and the estimated basis remaining after that year, then lets you download the schedule as a CSV.
Depreciation is not cash flow
Depreciation is a noncash tax deduction, while cash flow measures actual rent received minus expenses and debt service. Use the rental property cash flow calculator to evaluate property operations separately.
FAQ
How many years do you depreciate residential rental property?+
Under the common U.S. MACRS General Depreciation System, residential rental buildings are generally depreciated using the straight-line method over 27.5 years with a mid-month convention.
Can you depreciate the land under a rental property?+
No. Land is not depreciable. The purchase basis must be allocated between the land and the building using a supportable method.
When does rental property depreciation start?+
It generally starts when the property is placed in service and ready to rent. This is not necessarily the purchase date or the date the first tenant moves in.
How is first-year rental depreciation calculated?+
Residential rental real estate uses the mid-month convention. The property is treated as placed in service at the midpoint of its service month, so the first-year deduction depends on that month.
Does depreciation equal the amount of tax saved?+
No. Depreciation is a deduction, not a credit. Potential tax savings depend on the owner’s tax rate and whether tax rules allow the deduction to offset current taxable income.
Does this calculator handle cost segregation or recapture?+
No. It estimates the residential building under 27.5-year GDS only. It does not calculate shorter-life assets, bonus depreciation, passive-loss limits, adjusted conversion basis, or tax consequences when the property is sold.
Does this show a full 27.5-year depreciation schedule?+
Yes. The calculator shows every recovery year, the estimated annual building deduction, and the remaining depreciable basis. The schedule can be downloaded as a CSV.