Real Estate Depreciation Calculator (MACRS)
Calculate annual depreciation deductions for rental properties using MACRS. Residential and commercial property depreciation schedules.
How it works
MACRS depreciation = (Property Value - Land Value) ÷ Recovery Period. Residential = 27.5 years, Commercial = 39 years.
Example
$500K property - $100K land = $400K ÷ 27.5 years = $14,545 annual depreciation.
FAQ
What is rental property depreciation?
A tax deduction allowing you to recover the cost of rental property over 27.5 years (residential) or 39 years (commercial), reducing taxable income annually.
Can I depreciate land value?
No, only the building structure can be depreciated. Land doesn't wear out, so separate land value from total purchase price when calculating depreciation.
What happens when I sell a depreciated property?
You may owe depreciation recapture tax on the amount previously deducted, taxed at up to 25%. This can be deferred through 1031 exchanges.
Can I accelerate depreciation deductions?
Yes, through cost segregation studies and bonus depreciation on certain property components like appliances, flooring, and landscaping.
What if I don't claim depreciation?
The IRS assumes you claimed it anyway for recapture purposes. File Form 3115 to claim missed depreciation deductions from prior years.