Real Estate Property Depreciation Calculator

How the real estate property depreciation calculator works

This tool calculates MACRS straight-line depreciation for rental and commercial real property using the IRS mid-month convention. Enter the cost basis, recovery period, and the month and year the property was placed in service. The full depreciation schedule shows annual deductions, accumulated depreciation, and ending book value.

Residential rental property is typically depreciated over 27.5 years. Nonresidential real property uses a 39-year recovery period. For general business asset depreciation, try the depreciation calculator. For broader accumulated depreciation tracking, see the accumulated depreciation calculator.

MACRS straight-line depreciation formulas

Annual depreciation under the straight-line method divides cost basis by the recovery period:

The mid-month convention adjusts the first and last year. If placed in service in month m, the first-year fraction is:

The last year uses a fraction of 0.5/12. Schedules follow IRS Publication 946 rules for the 2026 tax year.

Worked example: $500,000 cost, 27.5 years, placed August 2026

1. Annual depreciation: $500,000 / 27.5 = $18,181.82
2. First-year fraction: (12 - 8 + 1 - 0.5) / 12 = 4.5 / 12
3. First-year depreciation: $18,181.82 x 4.5/12 = $6,818.18
4. Middle years: Full annual amount of $18,181.82 each year
5. Final year: $18,181.82 x 0.5/12 = $757.58

Frequently asked questions