Depreciable basis is not the full purchase price
Land is not depreciable. Start with the building and land acquisition price, add only acquisition costs properly capitalized into basis, and subtract the land allocation. A purchase of multiple assets may require a defensible fair-market-value allocation rather than a percentage chosen for convenience.
The result assumes the entered basis is already appropriate for depreciation. A former home converted to rental use, inherited or gifted property, partial rental use, improvements placed in service on different dates, and casualty or credit adjustments can require separate bases and schedules.
Residential, nonresidential, GDS, and ADS periods
For the supported 2018–2026 service years, the model uses 27.5 years for residential rental property under GDS and 39 years for nonresidential real property under GDS. Under ADS it uses 30 years for supported residential property and 40 years for nonresidential property.
Enter 1 for residential only when 80% or more of gross rental income is rental income from dwelling units under the applicable definition. Enter 1 for ADS only after confirming ADS is required or elected; the calculator does not decide election eligibility or irrevocability.
Placed in service is not necessarily the purchase date
Depreciation starts when the property is ready and available for rent, not merely when the deed closes or renovation begins. Enter the calendar month in which the building first met that placed-in-service standard for the modeled activity.
Real property uses the mid-month convention: it is treated as placed in service or disposed of at the midpoint of the month. That is why a July service date produces five and one-half months of first-year depreciation rather than six full months.
Read annual and first-year results separately
Full-year depreciation is the straight-line amount for a complete recovery year. First-year depreciation applies the service-month fraction, while the monthly figure is only the full-year amount divided by twelve for planning; tax returns use the convention, not equal monthly postings.
The final recovery year can include a remaining fraction, and a sale or other disposition changes the deduction. This calculator intentionally shows acquisition-year planning only and does not build a complete Form 4562 schedule through disposition.
Separate the building from shorter-life components
Appliances, furniture, certain land improvements, and components supported by a cost-segregation analysis can have recovery periods other than the building period. Do not leave those amounts in building basis and also depreciate them separately, because that would double count basis.
Use this page for the building-only baseline. If a study allocates basis to 5-, 7-, or 15-year property, compare the alternative on the cost segregation calculator and have the classifications reviewed against current authority and project records.
Reviewed methodology and sources
The methodology is reviewed for the stated version. The result remains a scenario estimate and depends on the inputs and applicable rules.
Rental Property Depreciation Calculator FAQ
Can land be depreciated?
No. The calculator subtracts the entered land value before computing depreciation. The allocation should be supported by relevant valuation evidence.
What does placed in service mean?
It generally means the property is ready and available for its income-producing use. It may differ from the purchase, renovation-start, tenant-move-in, or first-payment date.
What is the residential rental GDS period?
For the supported service years, the calculator uses 27.5 years under GDS. It uses 30 years when the supported residential scenario uses ADS.
Why is first-year depreciation lower than the annual amount?
MACRS treats real property as placed in service at the midpoint of its service month. The first year therefore contains only the remaining convention-adjusted fraction of a year.
Does this include appliances or improvements?
No. It models the entered building basis as one real-property asset. Separately placed improvements and shorter-life property need their own classification, date, method, and schedule.
Continue the property analysis
Compare this result with adjacent metrics, keeping each formula’s income, expense, and financing scope consistent.