Calculator inputs
Example data table
| Input or Output | Example Value | Notes |
|---|---|---|
| Purchase price | $325,000.00 | Total acquisition cost. |
| Land value | $65,000.00 | Removed from the depreciable basis. |
| Closing costs | $6,500.00 | Capitalizable building-related acquisition costs. |
| Capital improvements | $18,000.00 | Added to depreciable basis. |
| Rental use | 100% | Full rental use assumed. |
| Property type | Residential rental | Uses a 27.5-year recovery period. |
| Depreciable basis | $284,500.00 | (325,000 - 65,000 + 6,500 + 18,000) × 100% |
| Full-year depreciation | $10,345.45 | Basis divided by 27.5 years. |
Formula used
1) Building value
Building Value = Purchase Price − Land Value
2) Depreciable basis
Depreciable Basis = (Building Value + Allocable Closing Costs + Capital Improvements) × Rental Use %
3) Full-year depreciation
Full-Year Depreciation = Depreciable Basis ÷ Recovery Period
4) Monthly depreciation
Monthly Depreciation = Full-Year Depreciation ÷ 12
5) First-year mid-month factor
First-Year Fraction = (12 − Service Month + 0.5) ÷ 12
6) First-year depreciation
First-Year Depreciation = Full-Year Depreciation × First-Year Fraction
7) Accumulated depreciation
Accumulated Depreciation = Sum of all yearly depreciation amounts
8) Remaining basis
Remaining Basis = Depreciable Basis − Accumulated Depreciation
How to use this calculator
- Enter the property purchase price and separate the land value.
- Add closing costs that should be capitalized into the building basis.
- Include capital improvements that increase value or useful life.
- Set the rental use percentage for mixed-use properties.
- Select residential rental or nonresidential commercial property.
- Enter the placed-in-service date to apply the mid-month rule.
- Choose how many years you want in the displayed schedule.
- Optionally enter prior claimed depreciation and annual cash flow inputs.
- Press the calculate button to see the results above the form.
- Use the CSV and PDF buttons to export the schedule and summary.
Frequently asked questions
1) Why is land excluded from depreciation?
Land does not wear out, become obsolete, or get consumed in normal use the way a building does. Only the building and capitalized improvements are generally depreciable.
2) What recovery period does residential rental property use?
Residential rental property usually uses a 27.5-year straight-line recovery period. Nonresidential commercial property generally uses 39 years instead.
3) What does the mid-month convention do?
It treats the property as placed in service in the middle of the month, not on the exact day. That changes the first and final year depreciation amounts.
4) Should closing costs always be added to basis?
No. Only capitalizable costs that belong in the property basis should be added. Financing charges and immediately deductible items are handled differently.
5) How does mixed personal and rental use affect depreciation?
Only the rental or business-use portion is typically depreciable. This calculator lets you reduce the basis by entering a rental-use percentage below 100%.
6) Are repairs the same as capital improvements?
Usually not. Repairs often maintain current condition, while capital improvements extend useful life, increase value, or adapt the property to a new use.
7) Why include prior depreciation already claimed?
It helps estimate the remaining depreciable basis today, especially when you are reviewing a property already in service and want a quick remaining-basis snapshot.
8) Is this calculator a substitute for tax advice?
No. It is a practical estimator for planning and education. Real tax filings may require professional judgment, records, and property-specific adjustments.