Real Estate Depreciation Calculator
Annual depreciation and the tax savings it creates, with a correct mid-month first year.
Your numbers
The property
Tax profile
Annual tax savings
$3,258
Depreciation × your marginal rate, cash you don't send to the IRS.
- Annual depreciation
- $10,182
- Monthly depreciation
- $848
- First-year (mid-month)
- $9,758
- Depreciable basis
- $280,000
- 10-year tax savings
- $32,446
Purchase price minus land
10-year depreciation schedule
| Year | Depreciation | Cumulative | Tax savings |
|---|---|---|---|
| Year 1 | $9,758 | $9,758 | $3,122 |
| Year 2 | $10,182 | $19,939 | $3,258 |
| Year 3 | $10,182 | $30,121 | $3,258 |
| Year 4 | $10,182 | $40,303 | $3,258 |
| Year 5 | $10,182 | $50,485 | $3,258 |
| Year 6 | $10,182 | $60,667 | $3,258 |
| Year 7 | $10,182 | $70,848 | $3,258 |
| Year 8 | $10,182 | $81,030 | $3,258 |
| Year 9 | $10,182 | $91,212 | $3,258 |
| Year 10 | $10,182 | $101,394 | $3,258 |
Straight-line MACRS. Depreciation claimed is recaptured at up to 25% when you sell, unless you defer it with a 1031 exchange.
Estimates for planning only. Not financial, tax, or legal advice. Verify every number with your own due diligence and advisors.
How this calculator works
Depreciation lets rental-property owners deduct the cost of the building (not the land) over 27.5 years for residential property or 39 years for commercial, a paper loss that shelters real rental income from tax. On a typical DFW rental it's worth thousands of dollars a year.
The calculator uses correct straight-line MACRS math, including the mid-month convention for your first year, and shows the deduction and the tax savings at your marginal rate.
Related calculators
Real Estate Depreciation questions, answered.
The most defensible source is your county appraisal district's assessment, which values land and improvements separately. Apply the same ratio to your purchase price. In DFW, land commonly runs 15–25% of a single-family property's value.
The IRS treats real property as placed in service at the middle of the month it becomes available to rent, regardless of the exact day. A property placed in service in July gets 5.5 months of depreciation in year one. The calculator handles this automatically.
Depreciation claimed is 'recaptured' at up to 25% when you sell at a gain, and the IRS assumes you claimed it whether you actually did or not. A 1031 exchange defers recapture along with capital gains; see the 1031 Exchange Calculator.
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