Rental Property Depreciation Schedule Calculator

How the schedule is calculated

Rental real estate depreciation starts with basis, not just the purchase price. Land is not depreciable, so the calculator first allocates the purchase price and capitalized acquisition costs between land and building. It then adds building improvements made before the property was placed in service and applies the rental or business-use percentage.

The basis calculation is:

building ratio = (purchase price - land value) / purchase price

depreciable basis = ((purchase price + capitalized costs) x building ratio + pre-service improvements) x rental-use percent

Residential rental property uses a 27.5-year GDS recovery period. Nonresidential real property uses a 39-year GDS recovery period. Both use straight-line depreciation and the mid-month convention, which treats property placed in service during a month as placed in service at the midpoint of that month. A December placement therefore receives only one-half month of first-year depreciation.

For the displayed filing schedule, the calculator uses the rounded IRS mid-month table percentages: Publication 527 Table 2-2d and Publication 946 Appendix A Table A-6 for 27.5-year residential rental property, and Publication 946 Table A-7a for 39-year nonresidential real property. The final recovery year is adjusted so the schedule does not depreciate more than the entered depreciable basis.

What moves the result most

The land allocation usually has the largest effect because land is removed before depreciation begins. Capitalized acquisition costs matter only to the extent they are allocated to the building. Pre-service building improvements increase depreciable basis directly. The placed-in-service month mainly changes the first and final years; a January start gets almost a full first year, while a December start gets only one-half month.

What this calculator leaves out

This calculator is limited to federal GDS straight-line depreciation for post-1986 real property. It does not calculate depreciation recapture, gain on sale, passive-activity limits, at-risk limits, state depreciation differences, alternative depreciation system treatment, or a mid-month disposition calculation for a sale before full recovery.

Do not enter later roofs, additions, renovations, appliances, cost-segregation components, qualified improvement property, Section 179 property, bonus depreciation property, or other personal property as pre-service improvements unless they were part of the original building before it was first ready to rent. Those assets can require separate placed-in-service dates, recovery periods, and conventions.

Worked example

Suppose a residential rental was bought for $300,000, including $60,000 of land. The owner also capitalized $5,000 of eligible acquisition costs and completed $10,000 of building improvements before the property was ready to rent. With 100% rental use, the building ratio is 80%, so the depreciable building basis is (($300,000 + $5,000) x 80% + $10,000), or $254,000.

If the property was placed in service in July 2024, the IRS residential mid-month table gives a first-year percentage of 1.667%. The first-year deduction is $4,234.18. Full-year depreciation is $254,000 / 27.5, or $9,236.36 by the straight-line formula; the rounded IRS table schedule shows $9,235.44 for each full table year at 3.636%. Through 2026, accumulated table depreciation is $22,705.06 and the remaining depreciable basis is $231,294.94.