Rental Property Depreciation Methods Calculator
Compare depreciation methods for rental real estate.
Section 179 not applicable to rental property
Depreciable Basis
Building:$ 250000
Improvements:$ 20000
Land:$ 50000 (excluded)
Depreciable Basis:$ 270000
Recovery Period:27.5 years
Depreciation Schedule (First 10 Years)
| Year | Depreciation | Accumulated | Remaining |
|---|---|---|---|
| 1 | $ 4909 | $ 4909 | $ 265091 |
| 2 | $ 9818 | $ 14727 | $ 255273 |
| 3 | $ 9818 | $ 24545 | $ 245455 |
| 4 | $ 9818 | $ 34364 | $ 235636 |
| 5 | $ 9818 | $ 44182 | $ 225818 |
| 6 | $ 9818 | $ 54000 | $ 216000 |
| 7 | $ 9818 | $ 63818 | $ 206182 |
| 8 | $ 9818 | $ 73636 | $ 196364 |
| 9 | $ 9818 | $ 83455 | $ 186545 |
| 10 | $ 9818 | $ 93273 | $ 176727 |
Method Comparison
| Method | Recovery | First Year | Annual | Allowed? |
|---|---|---|---|---|
| Straight-Line (MACRS) | 27.5 yrs | $ 4909 | $ 9818 | Yes |
| Accelerated (MACRS) | 27.5 yrs | $ 0 | $ 0 | No |
| Bonus + Straight-Line | 27.5 yrs | $ 4909 | $ 9818 | No |
Tax Savings
First Year:$ 1178
Annual:$ 2356
Total:$ 64800
Recommendation
Standard MACRS straight-line over 27.5 years. Annual depreciation: $9818. First year (mid-month): $4909. Tax savings: $2356 per year.
Depreciation Key Points
- Residential: 27.5 years
- Commercial: 39 years
- Land not depreciable
- Straight-line only for rental
- Mid-month convention
- Bonus depreciation available
- Section 179 NOT allowed
- Improvements: 27.5/39 years
- Separate land/building
- Form 4562 for reporting