Real Estate Depreciation Calculator
Calculate annual depreciation deductions for investment property tax benefits
About this calculator
The Real Estate Depreciation Calculator helps investment property owners determine their annual depreciation deductions for tax purposes. This tool calculates the allowable depreciation amount based on property value, type, and acquisition details, enabling investors to maximize their tax benefits. By accurately computing depreciation deductions, property owners can reduce their taxable rental income and improve overall investment returns. Understanding depreciation is crucial for real estate investors to optimize their tax strategy and maintain proper financial records for IRS compliance.
How to use
Enter your property's purchase price, closing costs, and land value to determine the depreciable basis. Select the property type (residential or commercial) to apply the correct depreciation period. The calculator will compute your annual depreciation deduction using the Modified Accelerated Cost Recovery System (MACRS) method required by the IRS.
Frequently asked questions
How long can I depreciate rental property?
Residential rental properties are depreciated over 27.5 years, while commercial properties use a 39-year depreciation schedule under MACRS rules.
What costs can be included in depreciable basis?
Include purchase price, closing costs, legal fees, and improvements, but exclude land value since land cannot be depreciated.
Can I depreciate my primary residence?
No, only investment or business-use properties qualify for depreciation deductions. Personal residences are not eligible for depreciation benefits.