Rental Property Depreciation Calculator (MACRS)

The IRS lets you deduct the cost of a residential rental building over 27.5 years using the straight-line method, even while the property appreciates. This calculator estimates your depreciable basis, annual and monthly deduction, the reduced first-year amount under the mid-month convention, and a 5-year schedule.

Not tax advice. Land is not depreciable and must be excluded from your basis. Rules on placed-in-service dates, improvements, and disposition have edge cases — confirm your numbers with a tax professional.

Purchase price $ (include closing costs that are added to basis) Land value — enter a dollar amount or a % of the purchase price

Dollar amount Percent of price

Land value $

Land value % (0–100)

Use your property tax assessment's land / improvement split or an appraisal. Typical land allocation: 10–30%.

Placed in service (the month/year the property was ready and available for rent)

Month

Year

Building improvements cost $ (optional — renovations, new roof, HVAC, etc. placed in service the same year; each improvement starts its own 27.5-year clock)

How MACRS depreciation works for residential rentals

The IRS classifies residential rental real estate as 27.5-year property under MACRS (Modified Accelerated Cost Recovery System). Depreciation is straight-line: each year you deduct 1/27.5 of the building's depreciable basis (about 3.636% per year).

Depreciable basis = purchase price (plus qualifying closing costs) − land value. Land is never depreciable.
Mid-month convention: the month the property is placed in service counts as only half a month. So a property placed in service in January gets 11.5 months of depreciation in its first calendar year; June gets 6.5 months; December gets just 0.5 months. This is why your first-year deduction is usually smaller than a full year.
Improvements (a new roof, HVAC, addition) are generally depreciated over 27.5 years too, starting from their own placed-in-service date — this calculator treats them as placed in service the same year for simplicity.
Depreciation recapture: when you sell, the IRS "recaptures" the depreciation you took (or could have taken) and taxes it at up to 25%. You also can't deduct depreciation against property held for personal use — only rental use qualifies.

Sources: IRS Publication 946 (How to Depreciate Property), 26 U.S.C. § 168. Educational content only — not tax advice.