What is rental property depreciation?
Type what the rental property cost, the part that is land, and the month it was ready for rent. The rental property depreciation calculator applies the IRS 27.5-year table to the building and lists every year’s deduction.
- Depreciation in the first year
- $5,091.20
A rental property that cost $185,000.00, with $25,000.00 of land, placed in service in February depreciates $5,091.20 in the first year and $5,817.60 in a full year, through 2053.
- Basis for depreciation
- $160,000.00
- Depreciation in a full year
- $5,817.60
- First-year rate
- 3.182%
- Total depreciation
- $160,000.00
- Tax years with a deduction
- 28
- Last tax year
- 2053
- Years
- 28
Depreciation in the first year: $5,091.20. A rental property that cost $185,000.00, with $25,000.00 of land, placed in service in February depreciates $5,091.20 in the first year and $5,817.60 in a full year, through 2053.
How much is deducted each year?
What does each tax year look like?
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Works out the yearly depreciation of a residential rental building over 27.5 years with the IRS mid-month MACRS table, from its cost, land value and month placed in service.
Example with the default inputs (Cost of the property $185,000.00, Land value $25,000.00, Month placed in service February, Year placed in service 2026): A rental property that cost $185,000.00, with $25,000.00 of land, placed in service in February depreciates $5,091.20 in the first year and $5,817.60 in a full year, through 2053.
Method: Basis = cost − land. Depreciation for a recovery year = basis × the IRS Table A-6 rate for that year and the month placed in service ÷ 100 (27.5-year straight line, mid-month convention).
- Residential rental property under the General Depreciation System: straight line over 27.5 years with the mid-month convention, from IRS Publication 946 Table A-6.
- A calendar tax year, and the property is rented for the whole recovery period. A year of sale deducts less.
- Arithmetic is exact on the typed amounts; money shows to the cent, halves rounded up.
Worked examples
Each example is checked against the calculator on every build.
- Cost of the property $185,000.00, Land value $25,000.00, Month placed in service February, Year placed in service 2026 gives Depreciation in the first year $5,091.20, Basis for depreciation $160,000.00, Depreciation in a full year $5,817.60, First-year rate 3.182%, Total depreciation $160,000.00, Tax years with a deduction 28, Last tax year 2053.Source: IRS, Publication 527 (2025), Residential Rental Property, chapter 2, https://www.irs.gov/publications/p527, Table 2-2d example: building $160,000 of $185,000, February: $160,000 × 3.182% = $5,091 (rounded there to the dollar)
- Cost of the property $147,000.00, Land value $0.00, Month placed in service August, Year placed in service 2026 gives Depreciation in the first year $2,005.08, Basis for depreciation $147,000.00, First-year rate 1.364%, Tax years with a deduction 29, Last tax year 2054.Source: IRS, Publication 527 (2025), Residential Rental Property, chapter 2, https://www.irs.gov/publications/p527, converted residence example: $147,000 × 1.364% = $2,005 (rounded there to the dollar)
- Cost of the property $200,000.00, Land value $30,000.00, Month placed in service January, Year placed in service 2026 gives Depreciation in the first year $5,924.50, Basis for depreciation $170,000.00, Depreciation in a full year $6,181.20, First-year rate 3.485%.Source: IRS, Publication 527 (2025), Residential Rental Property, chapter 2, https://www.irs.gov/publications/p527, land and building split example (basis in the house $170,000); IRS, Publication 946 (2025), How To Depreciate Property, Table A-6, https://www.irs.gov/publications/p946: January, year 1 3.485%
- Cost of the property $100,000.00, Land value $0.00, Month placed in service July, Year placed in service 2023 gives Depreciation in the first year $1,667.00, Depreciation in a full year $3,636.00, Tax years with a deduction 29, Last tax year 2051.Source: IRS, Publication 946 (2025), How To Depreciate Property, Table A-6, https://www.irs.gov/publications/p946: July, year 1 1.667%
How it works
- Basis for depreciation = cost of the property − land value.
- Each recovery year: depreciation = basis × the Table A-6 rate for that year and the month placed in service ÷ 100.
- Accumulated = the depreciation so far, that year included. Basis left = basis − accumulated.
- Recovery year 1 is the tax year placed in service; each later recovery year is the next tax year.
The outputs:
- Depreciation in the first year = basis × the year 1 rate ÷ 100.
- Depreciation in a full year = basis × 3.636 ÷ 100 (the year 2 rate for every month; later years are 3.636 or 3.637).
- First-year rate: the year 1 rate for the month.
- Total depreciation: the sum of every year, which is the whole basis.
- Tax years with a deduction: 28 for January to June, 29 for July to December.
- Last tax year = year placed in service + rows − 1.
Table A-6 (percent of the basis):
| Month placed in service | Year 1 | Years in between | Last year |
|---|---|---|---|
| January | 3.485 | 3.636 for years 2 to 9; then 3.637 in years 10, 12, … 26 and 3.636 in years 11, 13, … 27 | 1.970 (year 28) |
| February | 3.182 | as January | 2.273 (year 28) |
| March | 2.879 | as January | 2.576 (year 28) |
| April | 2.576 | as January | 2.879 (year 28) |
| May | 2.273 | as January | 3.182 (year 28) |
| June | 1.970 | as January | 3.485 (year 28) |
| July | 1.667 | 3.636 for years 2 to 10; then 3.637 in years 11, 13, … 27 and 3.636 in years 12, 14, … 28 | 0.152 (year 29) |
| August | 1.364 | as July | 0.455 (year 29) |
| September | 1.061 | as July | 0.758 (year 29) |
| October | 0.758 | as July | 1.061 (year 29) |
| November | 0.455 | as July | 1.364 (year 29) |
| December | 0.152 | as July | 1.667 (year 29) |
Rules:
- The cost must be at least $0.01 and at most $1,000,000,000,000; the land value is $0 or more, at most $1,000,000,000,000.
- A land value equal to or more than the cost gives no answer, with the message "The land value must be less than the property cost: land is not depreciated."
- The year placed in service is a whole year from 1987 to 2100.
- No answer is too large or too small to show within these limits.
- The arithmetic is exact on the decimals you type. Money shows to the cent, with halves rounded up (away from zero), from the exact value. The rates show with at least 2 and at most 3 decimals (3.485%, 3.636%).
Figures that change each year
None: Table A-6 has been the same since 1987. The IRS republishes Publication 946 each year, so the data check compares the table with the 2026 edition when it comes out (early 2027).
| Figure | Value used | Source | Next check |
|---|---|---|---|
| Table A-6 | as above | Publication 946 (2025), Appendix A | Publication 946 (2026), due early 2027 |
When the data is out of date
After April 15, 2027 the page keeps using this table and says so above the result.
Assumptions
- Residential rental property (a house or apartment building that earns at least 80% of its gross rent from dwelling units) under the General Depreciation System.
- A calendar tax year, and the property stays a rental for the whole 27.5 years. In the year you sell, the deduction is smaller.
- The cost includes settlement costs and improvements made before it was placed in service.
Worked examples by hand
A $185,000 house with $25,000 of land, placed in service in February 2026 (Publication 527). Basis = 185,000 − 25,000 = $160,000. Year 1 = 160,000 × 3.182 ÷ 100 = $5,091.20 (the IRS example rounds to $5,091). A full year = 160,000 × 3.636 ÷ 100 = $5,817.60. The schedule runs 28 tax years, to 2053, and adds up to $160,000.
A converted home available for rent on August 1, 2026 (Publication 527). Basis $147,000, no land in the figure. Year 1 = 147,000 × 1.364 ÷ 100 = $2,005.08. 29 tax years, to 2054.
A $200,000 house split by assessed values (Publication 527). Building 85% = $170,000, land $30,000. Placed in service in January: year 1 = 170,000 × 3.485 ÷ 100 = $5,924.50; a full year = 170,000 × 3.636 ÷ 100 = $6,181.20.
$100,000 placed in service in July 2023 (Publication 946). Year 1 = $1,667; a full year (year 3, 2025) = $3,636; 29 tax years, to 2051.
Other questions people ask
How do I calculate depreciation on a rental property?
Take the cost of the property, subtract the land, and multiply what is left (the building’s basis) by the IRS rate for each year. A house bought for $185,000 with $25,000 of land has a $160,000 basis. Placed in service in February, year 1 is 3.182%: $5,091.20. A full year is 3.636%: $5,817.60.
Why can’t I depreciate the land?
Land does not wear out or get used up, so the tax rules never let you depreciate it. Only the building (and improvements to it) is depreciated, over 27.5 years for residential rental property.
How do I split the price between the land and the building?
Use the fair market value of each when you bought the property. If you are not sure, the IRS lets you use the ratio of the assessed values on the property tax bill: a $200,000 house assessed at $136,000 for the building and $24,000 for the land is 85% building, so the building’s basis is $170,000.
When does depreciation start?
When the property is ready and available for rent, even before a tenant moves in. A house bought in April, repaired, and ready for rent on July 5 is placed in service in July. The mid-month convention then counts July as half a month.
How much rental property depreciation do I get each year?
About 3.636% of the building’s basis (1 ÷ 27.5) in each full year. The first year is less, depending on the month: 3.485% for January down to 0.152% for December. The last year takes what is left, so the total is the whole basis after 28 or 29 tax years.
What happens to the depreciation when I sell?
Depreciation lowers your basis, so it raises your gain. The part of the gain that comes from the depreciation is unrecaptured section 1250 gain, taxed at up to 25%. Use the depreciation recapture calculator to estimate it.
Can I depreciate improvements?
Yes. An improvement such as a new roof or an addition is depreciated on its own, as residential rental property over 27.5 years from the month it is placed in service. Run the calculator again with its cost, $0 of land, and its month.