Property Depreciation Schedule Calculator
Calculate property depreciation using the MACRS method for residential and commercial real estate.
See your annual tax deduction schedule.
Annual Depreciation
Property depreciation allows you to deduct the cost of an investment property over its useful life for tax purposes.
MACRS Straight-Line Depreciation:
Annual Depreciation = Depreciable Basis / Recovery Period
Key rules:
- Residential rental: 27.5-year recovery period
- Commercial property: 39-year recovery period
- Land is not depreciable — only the building portion
Depreciable Basis = Purchase Price - Land Value + Improvements
Example: Residential rental purchased for $300,000, land value $60,000:
- Depreciable basis = $300,000 - $60,000 = $240,000
- Annual depreciation = $240,000 / 27.5 = $8,727/year
- Monthly deduction = $727/month
This is a non-cash deduction — you do not actually spend this money, but it reduces your taxable income.
Tips:
- Land is typically 15-25% of the property value
- Cost segregation studies can accelerate depreciation on certain components
- When you sell, depreciation is recaptured and taxed at up to 25%
- Improvements to the property can be depreciated separately