How Much Can I Depreciate My Rental?
Estimate depreciable basis, annual straight-line write-off, first-year mid-month depreciation, and a year-by-year residential or commercial schedule.
Quick answer: I estimate rental depreciation by subtracting land from purchase price, adding capitalized closing costs and improvements, then spreading that depreciable basis over 27.5 years (residential) or 39 years (commercial) using straight-line recovery and the mid-month convention. This is educational only — not tax advice.
Depreciation assumptions
Allocated land value: $80,000 (20.00%)
Improvements that add value are usually capitalized. Routine repairs are often deducted in the year paid — see repairs vs improvements.
Mid-month convention: first year uses 6.5 months of depreciation if placed in service in June.
Educational notice (not tax advice)
This calculator is educational only and is not tax, legal, or accounting advice. It does not model cost segregation, bonus depreciation, listed property, or depreciation recapture. Consult a CPA before you file or rely on these numbers.
Formulas used
- Depreciable basis = Purchase price − Land + Capitalized closing costs + Capital improvements
- Annual depreciation = Depreciable basis ÷ Recovery period (27.5 or 39 years)
- First-year depreciation = Annual depreciation × (12.5 − month placed in service) ÷ 12
- Estimated tax savings = Depreciation × Marginal tax rate
Annual depreciation
$12,364
Residential 27.5-year straight-line
Depreciable basis
$340,000
First-year (prorated)
$6,697
Estimated annual tax savings
$2,967
First-year tax savings
$1,607
AI Depreciation Insights
Yearly summary
Year-by-year depreciation schedule
Viewing 27.5-year straight-line recovery with mid-month convention from June 2026. Switch views to compare residential and commercial schedules on the same basis.
| Year | Calendar | Depreciation | Cumulative | Remaining basis | Est. tax savings |
|---|---|---|---|---|---|
| 1 | 2026 | $6,697 | $6,697 | $333,303 | $1,607 |
| 2 | 2027 | $12,364 | $19,061 | $320,939 | $2,967 |
| 3 | 2028 | $12,364 | $31,424 | $308,576 | $2,967 |
| 4 | 2029 | $12,364 | $43,788 | $296,212 | $2,967 |
| 5 | 2030 | $12,364 | $56,152 | $283,848 | $2,967 |
| 6 | 2031 | $12,364 | $68,515 | $271,485 | $2,967 |
| 7 | 2032 | $12,364 | $80,879 | $259,121 | $2,967 |
| 8 | 2033 | $12,364 | $93,242 | $246,758 | $2,967 |
| 9 | 2034 | $12,364 | $105,606 | $234,394 | $2,967 |
| 10 | 2035 | $12,364 | $117,970 | $222,030 | $2,967 |
| 11 | 2036 | $12,364 | $130,333 | $209,667 | $2,967 |
| 12 | 2037 | $12,364 | $142,697 | $197,303 | $2,967 |
| 13 | 2038 | $12,364 | $155,061 | $184,939 | $2,967 |
| 14 | 2039 | $12,364 | $167,424 | $172,576 | $2,967 |
| 15 | 2040 | $12,364 | $179,788 | $160,212 | $2,967 |
| 16 | 2041 | $12,364 | $192,152 | $147,848 | $2,967 |
| 17 | 2042 | $12,364 | $204,515 | $135,485 | $2,967 |
| 18 | 2043 | $12,364 | $216,879 | $123,121 | $2,967 |
| 19 | 2044 | $12,364 | $229,242 | $110,758 | $2,967 |
| 20 | 2045 | $12,364 | $241,606 | $98,394 | $2,967 |
| 21 | 2046 | $12,364 | $253,970 | $86,030 | $2,967 |
| 22 | 2047 | $12,364 | $266,333 | $73,667 | $2,967 |
| 23 | 2048 | $12,364 | $278,697 | $61,303 | $2,967 |
| 24 | 2049 | $12,364 | $291,061 | $48,939 | $2,967 |
| 25 | 2050 | $12,364 | $303,424 | $36,576 | $2,967 |
| 26 | 2051 | $12,364 | $315,788 | $24,212 | $2,967 |
| 27 | 2052 | $12,364 | $328,152 | $11,848 | $2,967 |
| 28 | 2053 | $11,848 | $340,000 | $0 | $2,844 |
FAQ: rental depreciation estimator
How do I estimate depreciation on my rental property?
I subtract land from the purchase price, add capitalized closing costs and capital improvements, then spread that depreciable basis using straight-line recovery: 27.5 years for residential rentals or 39 years for commercial property, with the mid-month convention in the first and last years.
Why can I not depreciate the land under my rental?
Land is not a wasting asset under common U.S. tax rules, so only the building and qualifying capital additions are depreciable. I allocate part of the purchase price to land using the closing statement, tax assessment, or an appraisal.
What is the mid-month convention for rental depreciation?
Residential and nonresidential real property generally use a mid-month convention. I treat the property as placed in service at the midpoint of the month I start using it as a rental, so the first year is a partial year even if I close on the 1st.
Is my rental 27.5-year residential or 39-year commercial?
Most houses, condos, and apartment buildings rented to tenants use 27.5-year residential rental recovery. Office, retail, and many other nonresidential buildings use 39 years. Mixed-use and special-use facts can differ, so I confirm classification with a CPA.
Do closing costs and improvements increase my depreciable basis?
Many acquisition costs that must be capitalized, plus later capital improvements, usually increase depreciable basis. Routine repairs are typically deducted in the year paid instead of being depreciated. This tool is an estimate, not a basis study.
Does this calculator give tax advice?
No. This estimator is educational only and is not tax, legal, or accounting advice. Cost segregation, bonus depreciation, partial-asset dispositions, and recapture are fact-specific. I consult a CPA before I file.
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