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📉 Depreciation Calculator

Calculate your annual depreciation deduction and tax savings. Residential rental property depreciates over 27.5 years (IRS Publication 946).

📍 Property Address (optional)
InputsYour Numbers
Property Details
Purchase Price?
$
Land Value?
$
Year Placed in Service?
Month Placed in Service?
Additional Improvements
Capital Improvements ($)?
$
Years Owned?
Tax Bracket
Federal Tax Bracket %?
%
Pro Forma: Planned Improvements
Planned Improvements ($)?
$
As-Is AnalysisCurrent
Enter values to see results
Annual Deduction
--
year 1+
Tax Savings / yr
--
at your bracket
Depreciable Basis
--
price - land
Useful Life
--
IRS schedule
Depreciation Schedule
Purchase Price--
Less: Land Value--
Depreciable Basis--
Capital Improvements--
Total Depreciable Basis--
Useful Life (residential)27.5 years
Annual Depreciation--
Tax Benefit
Annual Deduction--
Tax Bracket--
Annual Tax Savings--
Accumulated Depreciation--
Remaining Basis--
Pro FormaAfter Plan
Enter pro forma values
New Annual Deduction
--
with improvements
Additional Tax Savings
--
vs current
New Depreciable Basis
--
after improvements
Years to Recoup Impr.
--
via tax savings
After Improvements
Current Basis--
Planned Improvements--
New Depreciable Basis--
New Annual Depreciation--
New Annual Tax Savings--

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1
Enter Purchase Price & Land
Land cannot be depreciated. Find the land vs improvement split on your county tax assessment or use 15-20% as a rough estimate.
2
Add Capital Improvements
Only improvements that add value are depreciable -- not repairs. New roof, HVAC, addition = depreciable. Fixing a broken window = expense.
3
Enter Your Tax Bracket
Depreciation saves you your marginal rate on the deduction amount. At 32%, a $7,272 deduction saves $2,327/year in federal taxes.
4
Check Accumulated Depreciation
Over time, depreciation reduces your cost basis. When you sell, recapture tax (25%) applies to the amount depreciated. Factor this into exit planning.
5
Model Planned Improvements
The pro forma column shows how planned improvements increase your annual deduction. Capital improvements start a new 27.5-year depreciation schedule.
6
Consider Cost Segregation
For properties over $500K, cost segregation studies can accelerate depreciation by classifying components as 5, 7, or 15-year property. Can dramatically increase Year 1 deductions.

Depreciation is one of the most powerful tax benefits of owning rental property. The IRS allows you to deduct a portion of the property's cost each year as a 'wear and tear' expense, even though the property may actually be appreciating.


For residential rental property, the IRS uses a 27.5-year straight-line schedule under MACRS. A $200,000 depreciable basis generates $7,272/year in deductions. At a 32% tax bracket, that's $2,327 in actual tax savings every year -- regardless of cash flow.


Important: When you sell, depreciation is recaptured and taxed at 25% (Section 1250 unrecaptured gain). This is why cost basis tracking matters and why 1031 exchanges are so powerful -- they defer both capital gains and recapture tax.

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