Rental property depreciation calculator

Separate the building from the land

This calculator estimates deductions for a residential rental building using the general depreciation system, straight-line depreciation and the mid-month convention. The recovery period is twenty-seven and a half years. Because the first calendar year usually contains only part of that period, the schedule spans twenty-eight or twenty-nine tax years rather than showing the same deduction in every row.

Start with the property's tax basis before depreciation, including its land allocation. Enter the land portion separately. The calculator subtracts land because land itself is not depreciated. The remaining building basis is used for the whole schedule. A purchase price and a correct tax basis are not necessarily identical, so use records that account for the applicable acquisition and improvement treatment.

Choose the month and year the building was ready and available for rental use. That can differ from the purchase date or the date the first tenant moved in. The selected month determines the first-year table percentage and the length of the final partial year.

Read the annual schedule correctly

Each row uses the percentage in IRS Publication 946 Table A-6 for the selected starting month. The mid-month convention treats service as starting in the middle of that month. Full-year table percentages can alternate slightly because the IRS table itself is rounded; the calculator preserves those published percentages instead of replacing every row with an identical rounded rate.

The prominent yearly deduction is the first tax year's amount; the table supplies the deductions for every following year under continuous qualifying use. The schedule shows deductions, not an estimate of tax saved.

A land allocation equal to the entire basis leaves no depreciable building amount and produces zero deductions. Future service years are planning projections, not claims that future tax law is settled.

The method has a limited scope

The IRS sources describe broader depreciation rules than this form can assess. This version assumes a calendar-year taxpayer, wholly residential rental building and the stated GDS method. It does not determine eligibility for an alternative depreciation system, a shorter recovery period, bonus depreciation or an election affecting the property's treatment. Those choices need the actual tax facts.

A conversion from personal use may need a basis comparison using fair market value. Partial personal use, a change in business use and later improvements can also require separate treatment. No fields collect those facts here. Enter a properly established basis for the supported case rather than expecting the calculator to infer one from the property's price.

The schedule assumes the property remains in service throughout the recovery period. It is not the deduction to claim after an early sale or other disposal. The form has no disposal date, so it cannot apply the appropriate final-year convention to an early exit.

Take the schedule to your tax advisor

Keep the purchase allocation, closing records, improvement invoices and placed-in-service evidence with the calculation. An accountant can reconcile them with previous returns and decide which method applies. The yearly figure is a deduction estimate, not the amount of tax saved; actual tax effects depend on income, passive-activity rules and other facts.

Get advice before correcting missed depreciation, changing an established method or preparing a sale return. A missing claim does not necessarily remove depreciation from the later gain calculation. The related recapture tool uses a separate, limited sale-tax model and also depends on an accurate depreciation history.

Common questions