Enter your building value (excluding land) to calculate your annual IRS straight-line depreciation deduction over 27.5 years.
By Jessica Martinez · Real Estate Finance Editor · Updated June 2026Estimates only.
The IRS allows residential rental property owners to deduct the cost of the building, not the land, over 27.5 years using straight-line depreciation. The math behind that rule is simple: annual depreciation equals the building value divided by 27.5. Land never depreciates because it does not wear out, so the first real step in this calculation is separating what you paid for the structure from what you paid for the dirt underneath it.
Only the building value counts toward the deduction, never the land. Most owners split their purchase price using the assessed value ratio shown on a county property tax bill. If your property tax record shows the land at 20% of assessed value and the building at 80%, apply that same 80% to your actual purchase price to estimate a defensible building value for this calculator.
A $220,000 building value, this calculator's default, produces an annual depreciation deduction of exactly $8,000, a monthly figure of about $666.67, and a full deduction of $220,000 spread evenly across the 27.5-year recovery period. Every year you own the property, you get the same $8,000 deduction, regardless of whether the property's market value goes up or down in that year.
| Property type | IRS recovery period |
| Residential rental (this calculator) | 27.5 years |
| Commercial rental property | 39 years |
Improvements such as a new roof or HVAC system may qualify for shorter recovery periods under the modified accelerated cost recovery system, known as MACRS, or under bonus depreciation rules, both of which sit outside the straight-line math this tool runs.
This calculator provides a general estimate and is not tax or financial advice. Depreciation rules carry plenty of exceptions for partial-year placement in service, mixed-use properties and prior cost segregation studies. Consult a qualified CPA or tax advisor before you file.
Depreciation is a paper deduction, not cash in hand, so pair it with the rental property cash flow calculator to see what the property actually pays you month to month. And since the building-versus-land split usually comes from your county's own numbers, the property tax calculator is the fastest way to pull that ratio.
Enter the building value, excluding land, into the field above. This calculator divides that figure by 27.5 for the annual deduction, divides the annual figure by 12 for a monthly view, and reports the building value itself as the total you will deduct over the full recovery period, since straight-line depreciation always adds up to 100% of the depreciable basis by the end of the schedule.
You can depreciate the building and permanent improvements, but not the land. Personal property (appliances, carpeting) may qualify for faster depreciation under separate MACRS rules.
Depreciation begins when the property is placed in service, meaning it is ready and available for rent. It does not have to be occupied; it just needs to be available.
The IRS recaptures accumulated depreciation at the time of sale, typically taxing it at a maximum rate of 25% (unrecaptured Section 1250 gain). A 1031 exchange can defer this tax.
Yes. Over the full 27.5-year recovery period you deduct 100% of the depreciable basis, so the total equals the building value you entered.
Cost segregation is a tax strategy that reclassifies certain building components as personal property with shorter depreciation lives (5, 7, or 15 years), accelerating deductions. It is generally worthwhile for larger commercial or residential properties. Talk to a CPA.