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IRS MACRS rules

Rental Property Depreciation Calculator

Find your depreciable basis, your first-year deduction and a year-by-year schedule for a rental building, using the IRS straight-line method and mid-month convention: 27.5 years for residential rentals, 39 years for commercial property.

Enter your property

Rentals where most guests stay 30 days or less are often treated as nonresidential (39 years). Ask your preparer which applies.

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A common approach: apply the land-to-total ratio from your county property tax appraisal to the price.

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Such as title fees, recording fees, transfer taxes. Not loan costs.

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Made before it was first available to rent.

When it was ready and available to rent, not when the first guest arrived.

First-year depreciation

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Depreciable basis
Full-year depreciation
Recovery period
Final year of depreciation
Year-by-year schedule
YearDepreciationRemaining basis
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    Estimate only. General information, not tax advice for your situation.

    How rental depreciation works

    1. 1

      Find the basis

      Price plus certain closing costs and improvements, minus the land. Land is never depreciated.

    2. 2

      Spread it over the recovery period

      Residential rental buildings: 27.5 years. Nonresidential real property: 39 years. Straight line, the same amount each full year.

    3. 3

      Apply the mid-month convention

      The property is treated as placed in service in the middle of the month, so the first and last years are partial.

    Worked example

    A long-term rental bought for $350,000, with $70,000 of land value, $6,000 of closing costs and $4,000 of improvements, ready to rent in March 2026.

    Depreciable basis$290,000
    Full-year depreciation ($290,000 / 27.5)$10,545
    2026 depreciation (9.5 of 12 months)$8,348
    Final year2053

    The IRS percentage tables in Publication 946 round to three decimals, so a table-based result can differ by a few dollars. Made-up numbers.

    What it includes, and what it doesn't

    • MACRS general depreciation system, straight line, mid-month convention
    • 27.5-year residential and 39-year nonresidential recovery periods
    • Full schedule through the final partial year
    • Not included: furniture, appliances and other shorter-life items (5 or 7 years, which may qualify for bonus depreciation), cost segregation, later improvements (each gets its own schedule), or a sale year
    • A home you lived in before renting: the basis is the lower of its adjusted basis or fair market value on the day it became a rental
    • Personal use of the property can reduce the deduction
    Can I skip depreciation?

    Not safely. When you sell, the IRS figures your gain as if you took the depreciation you were allowed, even if you didn't claim it. That's why depreciation belongs on every rental return.

    When does depreciation start?

    When the property is placed in service: ready and available for rent. A rental listed in March starts in March, even if the first tenant moves in later.

    How do I find the land value?

    A common method is the county appraisal: if the county values the land at 20% of the total, use 20% of your price. An appraisal or cost segregation study can also support the split.

    Is a short-term rental 27.5 or 39 years?

    Residential rental property excludes units in buildings mostly used on a transient basis. Many preparers treat rentals with average stays of 30 days or less as 39-year property. It depends on your facts, so confirm before filing.

    Sources

    Built and reviewed by Taz, U.S. tax preparer. Last reviewed November 1, 2026.

    Rental books that keep depreciation straight

    See long-term rental bookkeeping and short-term rental bookkeeping.

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