Estimate annual depreciation for a residential or commercial rental. Straight-line, building basis only. Runs in your browser, nothing is saved or sent anywhere.
Estimate only. Confirm basis, land allocation, and method with your tax professional. SealedFolio is not tax advice.
SealedFolio tracks depreciation and Schedule E automatically across your whole portfolio. See how it works. More tools: all calculators.
Depreciation lets you deduct the cost of a rental building over its useful life, even in years the property gains value. The IRS uses straight-line depreciation under MACRS: the same deduction every year across a fixed recovery period.
The calculator above applies this for either property type. Enter the purchase price, land value, and any capital improvements, and it returns your depreciable basis and annual deduction.
Buildings use straight-line depreciation, but shorter-life components inside a property (appliances, flooring, fixtures, land improvements) can be depreciated faster, often over 5, 7, or 15 years. A cost segregation study breaks a property into these components to accelerate deductions early on. This calculator covers the straight-line building deduction, which is the largest and most common piece.
When you sell, the depreciation you took is subject to recapture tax of up to 25 percent, which is one reason investors use a 1031 exchange to defer it. For the income side, pair this with the Schedule E and cash flow calculators.
Residential rental buildings depreciate over 27.5 years and commercial over 39 years, using the straight-line method on the building value only. Land is not depreciable, so you subtract the land value from the purchase price first, then divide the building basis by the recovery period.
The building portion of the purchase price plus certain closing costs and capital improvements. Land value is excluded. This calculator uses your building basis and recovery period to estimate the annual deduction.
Yes. SealedFolio maintains depreciation schedules per property and portfolio-wide, for both 27.5-year residential and 39-year commercial, and rolls them into your Schedule E reports.