Rental property depreciation calculator
Rental property depreciation, with and without a study
See your 27.5-year depreciation next to what a cost segregation study would let you deduct this year. Works for single-family homes, condos, townhouses and up to fourplexes.
Estimated tax savings on your 2026 return
Example property$30k – $43k
From $95k–$134k of extra depreciation, compared with $7,091 without a study.
| Depreciation | 2026 deduction | 5 years |
|---|---|---|
| No study | $7,091 | $59,455 |
| With a study, low | $102,376 | $140,602 |
| With a study, high | $141,196 | $173,662 |
Where your $360,000 of basis goes with a study
- 5-year items
- $82,800
- 15-year site work
- $54,000
- 27.5-year building
- $223,200
Express Study from $895
About 41× its cost in year one
- Uses 100% bonus depreciation, available for homes bought and placed in service after Jan 19, 2025.
- Long-term rental losses are passive. They offset W-2 income only with real estate professional status or the $25k allowance (phases out above $100k income). Unused losses carry forward.
Getting an accurate number
- 1
Enter your total cost
Contract price plus capitalized closing costs. If the home was your residence first, use the lower of your cost or its market value on the day you converted it.
- 2
Separate the land
Use the land-to-total ratio from your county assessment. In expensive metros land can be 40% or more; in newer suburbs it is often 15–20%.
- 3
Add improvements
Capital improvements made before or after it became a rental. Skip routine repairs, which are deducted when paid.
- 4
Set the date it was rentable
Listed, ready and available. A vacant home you were fixing up starts depreciating when the work is done.
Why 27.5 years undersells most rentals
The 27.5-year life fits the shell of a house: framing, roof, plumbing, wiring. It overstates the life of the carpet, the dishwasher and the backyard fence by decades.
On a typical single-family rental, 27–38% of the depreciable basis qualifies for 5- or 15-year lives. With 100% bonus depreciation for homes bought after January 19, 2025, that share is deductible in the first year.
Reading the three rows
No study is the default schedule.Low and high bracket the share of basis studies usually move for that property type. Furnished homes, newer finishes and more site work land closer to high.
Questions
How is rental property depreciation calculated without a study?
Take the purchase price, subtract land, add capital improvements, and divide by 27.5 years. The first year is prorated by month under the mid-month convention: a rental placed in service in June deducts about 1.97% of basis in year one, then 3.636% each full year after.
Is depreciation different for a duplex than a single-family rental?
The building life is the same 27.5 years. A duplex often reclassifies a little more because it has two kitchens, two sets of appliances and more flooring per square foot. Choose 'Duplex to fourplex' in the calculator to see the difference.
What if my long-term rental losses are passive?
Passive losses offset passive income, including other rental profits, and any excess carries forward with no expiration. They are released in full when you sell the property in a taxable sale. A study still front-loads deductions you will use, just on a different timeline.
Can these losses offset my W-2 income?
Not automatically. Rental losses are passive by default, so they offset passive income first and carry forward if unused. There are three ways to use them against wages.
First, the short-term rental route: if the average guest stay is 7 days or less and you materially participate (commonly 100+ hours and more than anyone else, cleaners included), the activity is not treated as passive.
Second, real estate professional status: more than 750 hours a year and more than half your working time in real estate, plus material participation in the rentals.
Third, the $25,000 allowance for active landlords, which phases out between $100,000 and $150,000 of modified adjusted gross income. Your CPA decides which applies to you.
I bought my rental years ago. Is it too late?
No. A look-back study works on any rental placed in service after 1986. Your CPA files Form 3115 (an automatic change in accounting method) and takes all the missed depreciation as a single catch-up deduction in the current year. No amended returns.
The shorter-life parts use the bonus rate from the year the rental was first placed in service. A 2022 rental still gets 100%, a 2023 rental 80%.
What happens when I sell? Do I pay it all back?
Some of it. On a taxable sale, depreciation on the 5-year parts is recaptured as ordinary income, and depreciation on the building and site work is taxed at up to 25%. Recapture only applies to gain; if you sell at a loss there is nothing to recapture.
Even so, a deduction today at 32–37% that's repaid years later is usually worth more than the same deduction spread over 27.5 years. You can also defer with a 1031 exchange, and heirs receive a stepped-up basis that wipes out recapture. If you expect to sell within two years, a study may not pay off. Ask us and we'll model it.
Other calculators: Airbnb & STR, renovation, bonus depreciation
Find out what your rental is worth on this year’s return
A free proposal with your estimated savings and a fixed fee, usually within one business day. Studies start at $895.