Rental Property Depreciation Calculator (27.5 Years, Mid-Month)
Residential rental buildings placed in service after 1986 are generally depreciated over 27.5 years using the straight line method and the mid-month convention. Enter your numbers below to see the depreciable basis, the first-year amount and the full-year amount.
Calculator
- Depreciable basis (building)
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- Each full year (÷ 27.5)
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- Per month
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How the numbers work
- Land is excluded. Land doesn't wear out, so only the building part of the price is depreciated. If the contract doesn't split the price, Pub. 527 allows using the ratio from the property-tax assessment (its example: $136,000 house ÷ $160,000 assessed = 85% of a $200,000 price, so a $170,000 building basis).
- Some closing costs are added to basis: abstract fees, charges for installing utility services, legal fees, recording fees, surveys, transfer taxes, title insurance, and amounts the seller owes that you agree to pay. Loan costs such as points, credit reports and lender appraisals are not added.
- Straight line, 27.5 years, mid-month. Property placed in service in any month is treated as placed in service at the middle of that month, so year one gets (12 − month + 0.5) ÷ 12 of a full year.
- Depreciation starts when the property is ready and available for rent, not when the first tenant moves in.
First-year percentage by month (computed)
Year-one share of a full year's depreciation by the month the building is placed in service, and the dollar amount for an example $200,000 building basis. Full years are 3.636% ($7,272.73 on $200,000).
| Placed in service | Year-one % | On $200,000 basis |
|---|---|---|
| Jan | 3.485% | $6,969.70 |
| Feb | 3.182% | $6,363.64 |
| Mar | 2.879% | $5,757.58 |
| Apr | 2.576% | $5,151.52 |
| May | 2.273% | $4,545.45 |
| Jun | 1.970% | $3,939.39 |
| Jul | 1.667% | $3,333.33 |
| Aug | 1.364% | $2,727.27 |
| Sep | 1.061% | $2,121.21 |
| Oct | 0.758% | $1,515.15 |
| Nov | 0.455% | $909.09 |
| Dec | 0.152% | $303.03 |
Computed as (12 − month + 0.5) ÷ 12 ÷ 27.5. IRS Table 2-2d shows the same percentages rounded to three decimals.
Check against the IRS example
Pub. 527's example: a $185,000 house where the contract shows $160,000 for the building and $25,000 for land, placed in service on February 8. The table rate for February in year one is 3.182%, giving $5,091 ($160,000 × 3.182%). Enter 185000, 25000, 0 and month 2 above and the calculator shows $5,090.91, which rounds to the same figure. Full years after that are $160,000 ÷ 27.5 = $5,818.18 (the table's 3.636%).
Appliances, carpet and furniture are different
Pub. 527, Table 2-1: appliances, carpets and furniture used in a residential rental are 5-year property under GDS; fences and shrubbery are 15-year; additions and improvements such as a new roof use the recovery period of the property they're added to. Those shorter classes use different methods and conventions; see Pub. 946.
Quick answers
How many years do you depreciate a residential rental property?
27.5 years under the General Depreciation System, using the straight line method and the mid-month convention (IRS Publication 527).
Can you depreciate the land under a rental house?
No. Publication 527 says land can't be depreciated because it doesn't wear out, become obsolete or get used up.
Keep landlord books in these categories
Our rental spreadsheets use Schedule E-style expense categories (you can rename them), track security deposits separately from income, and total everything per property: