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Rental Property Depreciation Calculator

Work out yearly depreciation on a residential rental, the first-year amount and what's recaptured when you sell.

Updated November 4, 2026. Free, no sign-up; everything runs in your browser and nothing you type is stored.

Rental property depreciation calculator

Purchase price ($)Land value (not depreciable) ($)Closing costs you can add to basis ($)Improvements before renting ($)Month placed in serviceYear placed in serviceYears you expect to hold it

Full-year depreciation

–

–First-year depreciation (mid-month)

–Depreciable basis

–Depreciation recapture at sale

How rental property depreciation works

Residential rental buildings are depreciated straight-line over 27.5 years under MACRS (IRS Publications 527 and 946). Only the building counts: land is never depreciable, so split the price using the county assessment or an appraisal. Many closing costs (title, recording, legal fees) and improvements made before renting add to basis; financing costs don't.

Mid-month convention: the property is treated as placed in service in the middle of its first month, so year 1 gets a partial amount: 3.485% for January down to 0.152% for December.
Full years: 1/27.5 of basis, 3.636% a year.
Depreciation is "allowed or allowable": it lowers your basis even if you forget to claim it, so claim it every year on Schedule E.

Worked example

A $400,000 rental with $80,000 of land, $6,000 of capitalized closing costs and $14,000 of improvements has a depreciable basis of $340,000. Placed in service in June, year 1 gets 6.5 months: $6,697. Every full year after that is $12,364, which offsets rental income on Schedule E.

Recapture when you sell

Depreciation taken is taxed as unrecaptured section 1250 gain at up to 25% when you sell, before the rest of the gain gets long-term capital gains rates; the sale goes on Form 4797. A 1031 exchange can defer it. Cash flow and returns: cash on cash return calculator.

Common questions

How long do you depreciate a rental property?

27.5 years straight-line for residential rental buildings.

Can you depreciate land?

No, only the building and improvements.

How is depreciation taxed when you sell a rental?

As unrecaptured section 1250 gain, at up to 25%.

Sources

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General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.