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Rental property depreciation calculator
Your depreciable basis, the yearly deduction over 27.5 years, the first-year amount by the month the rental was placed in service, and the full schedule.
Yearly depreciation (full years)
$0
Depreciable basis $0 over 27.5 years.
Year-by-year schedule
Mid-month convention, straight line (IRS Publication 946, Table A-6). Rental losses can be limited by the passive activity rules. When you sell, depreciation you took or could have taken is taxed at up to 25 %.
The formula
Yearly depreciation = (Price + buying costs + improvements - land) / 27.5
Residential rental buildings use the General Depreciation System, straight line over 27.5 years, with the mid-month convention. Full background, including what goes into the basis, is in rental property depreciation explained.
First-year percentage by month (IRS Table A-6)
| Month placed in service | Year 1 | Years 2 onward |
|---|---|---|
| Jan | 3.485 % | 3.636 % |
| Feb | 3.182 % | 3.636 % |
| Mar | 2.879 % | 3.636 % |
| Apr | 2.576 % | 3.636 % |
| May | 2.273 % | 3.636 % |
| Jun | 1.970 % | 3.636 % |
| Jul | 1.667 % | 3.636 % |
| Aug | 1.364 % | 3.636 % |
| Sep | 1.061 % | 3.636 % |
| Oct | 0.758 % | 3.636 % |
| Nov | 0.455 % | 3.636 % |
| Dec | 0.152 % | 3.636 % |
Where it goes on your return
Depreciation is reported on Form 4562 in the first year and then on Schedule E with the rest of your rental expenses. See how rental income is taxed.
Questions
How is rental property depreciation calculated?
Take the cost of the building (purchase price plus certain buying costs and improvements, minus the value of the land) and deduct it in equal parts over 27.5 years. The first year is reduced by the mid-month convention: you get only the months from the middle of the month you first offered the property for rent.
Why can't I depreciate the land?
Land does not wear out, so the IRS does not allow it to be depreciated. You need a split between land and building; the assessor's values on your property tax bill are a common way to get one.
When does depreciation start?
When the property is placed in service: the date it is ready and available for rent, not the date of the first tenant or the purchase date.
Is depreciation optional?
Not really. When you sell, the IRS taxes the depreciation you were allowed to take, whether you took it or not. Skipping it gives you the tax bill later without the deduction now.
What is depreciation recapture?
When you sell a rental at a gain, the part of the gain that comes from depreciation is taxed at up to 25 % instead of the usual long-term capital gains rates.
Sources
Next steps
Last updated November 5, 2026.