Free tool — depreciation schedule

Rental property depreciation
calculator.

Depreciation is the deduction you take for the building wearing out — a paper loss you can claim against rental income in a year when nothing actually broke. Residential rental property is written off over 27.5 years, straight line, and only the building counts: land never depreciates. Enter your numbers to see the depreciable basis and the annual deduction it produces.

basis inputs

purchase price ($)

closing costs added to basis ($)

land share of value (%)

capital improvements ($)

month placed in service (1–12)

Land share defaults to 20%. The common method is your county assessor's own split — take the assessed land value divided by the total assessed value and use that ratio. It varies by state and by county, so use your assessment, not this default.

annual depreciation deduction

$9,068

per year · 27.5-year straight line

how the basis is built

purchase price$285,000

closing costs in basis+ $4,200

land value (20%)($57,840)

building basis$231,360

capital improvements+ $18,000

depreciable basis$249,360

monthly equivalent

$756

annual ÷ 12

first year

$8,690

mid-month · simplified

total over 27.5 yrs

$249,360

the full basis, spread

land excluded

$57,840

never depreciates

This is a simplified estimate, not a tax return. Depreciation rules, which closing costs get capitalized, bonus depreciation and Section 179 treatment, cost segregation, and the recapture waiting on the other end of a sale all vary by state and by situation — run your real numbers past a CPA before you file anything. The calculator assumes residential rental property on the 27.5-year straight-line schedule and applies the mid-month convention to the first year only. If the vocabulary is new, adjusted basis and recapture are defined in the investing glossary. And keep this number out of your cash-flow math: depreciation is a deduction, not a bill, so it never belongs in your rental operating expenses.

Depreciation · 101

A paper loss.
A real bill later.

Three things decide whether your schedule holds up: the years, the land split, and what happens on the day you sell.

27.5 years, straight line.

Depreciable basis ÷ 27.5 = the same deduction every full year. It shelters rental income without costing you a dollar of cash — the building is assumed to wear out whether or not it did. Commercial property runs 39 years instead.

residential27.5 years

commercial39 years

methodstraight line

Land is excluded.

Dirt does not wear out, so it never depreciates. Every dollar you allocate to land is a dollar off your schedule, which is why the split is the input people get wrong most often. The county assessor ratio is the common method, and land commonly lands somewhere around 15–25% of value.

typical land share15–25%

sourceassessor ratio

documentedbeats convenient

Recapture is waiting.

The mistake that ruins it: treating depreciation as free money and forgetting the sale. Every deduction lowers your basis, and on sale that share of the gain is recaptured at up to 25% federal plus state. Skipping the deduction does not help — it is figured on depreciation allowed or allowable. A 1031 exchange defers it rather than erasing it.

recapture rateup to 25% federal

plusstate, varies

if you skip ityou still owe

FAQ

Before you file.

General information on how the schedule works — never tax advice, and never a substitute for your own CPA.

— How many years —

How many years do you depreciate a rental property?

Residential rental property is depreciated over 27.5 years, straight line — the same amount every full year. Commercial property runs 39 years. Only the building sits on that schedule: land is excluded, and shorter-lived items like appliances, carpet and land improvements have their own recovery periods. Treatment varies by situation and by state — consult a CPA.

— Cost basis —

What is the cost basis for depreciation on a rental property?

Start with the purchase price, add the closing costs that get capitalized rather than deducted — title fees, recording, transfer taxes, survey — subtract the land, then add capital improvements. Loan points and prepaid taxes or insurance are generally not part of basis. Which costs belong in basis varies, so have a CPA check your list before you file.

— Land vs building —

How do I split land value from building value?

The common method is the county assessor ratio: divide the assessed land value by the total assessed value, then apply that percentage to your purchase price plus capitalized closing costs. An appraisal that states site value separately works too. Land shares commonly land somewhere around 15 to 25%, and it varies by market — a number you can document beats a convenient one.

— On the sale —

What happens to depreciation when I sell?

It comes back as depreciation recapture. The share of your gain matching the depreciation you took is unrecaptured Section 1250 gain, taxed at up to 25% federal, plus whatever your state charges. Skipping the deduction does not save you: recapture is figured on depreciation allowed or allowable, so you owe it either way. Rules vary by state — consult a CPA.

Live · all 50 states

Depreciation is the tax layer.
Cash flow is the deal.

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Rental property depreciationcalculator.

A paper loss.A real bill later.