{
  "id": "rental-property-depreciation",
  "version": "5dd232b94cdb",
  "status": "published",
  "name": "Rental Property Depreciation Calculator",
  "question": "What is rental property depreciation?",
  "summary": "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.",
  "category": "finance",
  "subcategory": "mortgage-and-real-estate",
  "url": "https://www.acalculator.org/finance/rental-property-depreciation-calculator",
  "markdown": "https://www.acalculator.org/finance/rental-property-depreciation-calculator.md",
  "kind": "schedule",
  "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).",
  "assumptions": [
    "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."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "cost": {
        "title": "Cost of the property",
        "description": "What the rental property cost, land included: the price plus settlement costs and improvements.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0.01,
        "maximum": 1000000000000
      },
      "land": {
        "title": "Land value",
        "description": "The part of the cost that is for the land, which is never depreciated.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000
      },
      "month": {
        "title": "Month placed in service",
        "description": "The month the property was ready and available for rent.",
        "type": "string",
        "enum": [
          "1",
          "2",
          "3",
          "4",
          "5",
          "6",
          "7",
          "8",
          "9",
          "10",
          "11",
          "12"
        ]
      },
      "year": {
        "title": "Year placed in service",
        "description": "The calendar tax year the property was ready for rent; it labels the rows.",
        "type": "integer",
        "minimum": 1987,
        "maximum": 2100
      }
    }
  },
  "outputs": {
    "first": {
      "label": "Depreciation in the first year",
      "description": "Basis × the first-year rate for the month placed in service ÷ 100.",
      "format": "money"
    },
    "basis": {
      "label": "Basis for depreciation",
      "description": "The cost of the property less the land value.",
      "format": "money"
    },
    "second": {
      "label": "Depreciation in a full year",
      "description": "Basis × 3.636 ÷ 100: year 2, and about every later year.",
      "format": "money"
    },
    "rate": {
      "label": "First-year rate",
      "description": "The Table A-6 percent for recovery year 1 and the month placed in service.",
      "format": "percent"
    },
    "total": {
      "label": "Total depreciation",
      "description": "The sum of every year: the whole basis.",
      "format": "money"
    },
    "years": {
      "label": "Tax years with a deduction",
      "description": "How many tax years the schedule runs: 28 or 29.",
      "format": "integer"
    },
    "last": {
      "label": "Last tax year",
      "description": "The tax year of the final deduction.",
      "format": "integer"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "cost": 185000,
      "land": 25000,
      "month": "2",
      "year": 2026
    },
    "outputs": {
      "first": 5091.2,
      "basis": 160000,
      "second": 5817.6,
      "rate": 3.182,
      "total": 160000,
      "years": 28,
      "last": 2053
    },
    "text": "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."
  },
  "examples": [
    {
      "given": {
        "cost": 185000,
        "land": 25000,
        "month": "2",
        "year": 2026
      },
      "expect": {
        "first": 5091.2,
        "basis": 160000,
        "second": 5817.6,
        "rate": 3.182,
        "total": 160000,
        "years": 28,
        "last": 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)"
    },
    {
      "given": {
        "cost": 147000,
        "land": 0,
        "month": "8",
        "year": 2026
      },
      "expect": {
        "first": 2005.08,
        "basis": 147000,
        "rate": 1.364,
        "years": 29,
        "last": 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)"
    },
    {
      "given": {
        "cost": 200000,
        "land": 30000,
        "month": "1",
        "year": 2026
      },
      "expect": {
        "first": 5924.5,
        "basis": 170000,
        "second": 6181.2,
        "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%; hand calculation in content.mdx"
    },
    {
      "given": {
        "cost": 100000,
        "land": 0,
        "month": "7",
        "year": 2023
      },
      "expect": {
        "first": 1667,
        "second": 3636,
        "years": 29,
        "last": 2051
      },
      "source": "IRS, Publication 946 (2025), How To Depreciate Property, Table A-6, https://www.irs.gov/publications/p946: July, year 1 1.667%; year 3 3.636% of $100,000 = $3,636"
    }
  ],
  "sources": [
    "IRS, Publication 527 (2025), Residential Rental Property, chapter 2: land is not depreciated; splitting the cost by assessed values ($200,000 house, 85% building, basis $170,000); placed in service when ready and available for rent; Table 2-2d examples ($160,000 building of a $185,000 house placed in service in February, 3.182%, $5,091; a converted residence available August 1, $147,000 × 1.364% = $2,005). https://www.irs.gov/publications/p527 (retrieved 2026-10-19)",
    "IRS, Publication 946 (2025), How To Depreciate Property: residential rental property is depreciated by straight line over 27.5 years with the mid-month convention; Appendix A, Table A-6 (an image on the page); the July example (year 3: $100,000 × 3.636% = $3,636). https://www.irs.gov/publications/p946 (retrieved 2026-10-19)"
  ],
  "related": [
    "macrs-depreciation",
    "depreciation-recapture",
    "rental-property",
    "cap-rate"
  ],
  "changelog": []
}