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Rental Property Depreciation Calculator
Split out the land, find your depreciable basis, and estimate the annual deduction and tax savings over a 27.5-year schedule — with a year-by-year cumulative view.
Basis
Schedule
Annual depreciation deduction$10,182Over a 27.5-year schedule
Depreciable basis$280,000
Monthly$848
Annual tax savings$2,444
How to use this calculator
Enter the purchase price and the share allocated to land, then the useful life (27.5 years for residential, 39 for commercial) and your marginal tax rate. The calculator returns your depreciable basis, annual and monthly deduction, the tax it saves, and a cumulative schedule.
What the metrics mean
- Depreciable basis — purchase price minus the land allocation.
- Useful life — 27.5 years for residential rentals, 39 for commercial.
- Annual depreciation — depreciable basis divided by useful life (straight-line).
- Tax savings — the annual deduction multiplied by your marginal tax rate.
Frequently asked questions
- How is rental property depreciation calculated?
- Subtract the land value from the purchase price to get your depreciable basis, then divide by the useful life — 27.5 years for residential rentals. The result is your annual straight-line deduction.
- Why can’t I depreciate land?
- The IRS treats land as non-depreciable because it does not wear out. Only the building and improvements depreciate, so you allocate a portion of the price to land first.
- How much tax does depreciation save?
- Multiply the annual deduction by your marginal tax rate. A $12,700 deduction at a 24% rate shelters about $3,050 of tax — without spending cash that year.
- What is depreciation recapture?
- When you sell, the depreciation you took is recaptured and taxed at up to 25%. A 1031 exchange can defer it, and a cost segregation study can accelerate deductions in the early years.
Tracking deductions across rentals? dre1mery.com keeps basis and depreciation current on every property you own.