The land allocation must be separated from total acquisition cost before the schedule can be built correctly.
Real Estate Accounting
Rental property depreciation schedule with mid-month convention applied.
Enter property value, land allocation, and month placed in service to build a year-by-year depreciation schedule for residential (27.5-year) or commercial (39-year) rental property.
Direct answerA rental property depreciation schedule applies IRS straight-line depreciation over 27.5 or 39 years with mid-month convention to calculate annual deductions and remaining basis.
27.5-year and 39-yearMid-month conventionFull-life schedule
1. Enter property details
CalculatorEnter purchase price, land value, improvements, and month placed in service to build the depreciation schedule.
Enter property details or load a sample to build the depreciation schedule.
Live Tool
Rental Property Depreciation Schedule in the browser
Enter the property details to build the annual depreciation schedule before moving into a tax workpaper or basis tracking file.
Privacy-first workflow
This page runs in the browser and does not upload any data.
What this tool is built to solve
A rental property depreciation schedule applies IRS straight-line depreciation over 27.5 or 39 years with mid-month convention to calculate annual deductions and remaining adjusted basis.
Properties placed in service in January get more first-year depreciation than those placed in service in December.
Every year of depreciation deducted reduces adjusted basis and increases taxable gain at disposition.
Key signals
Review the key depreciation figures before moving into a Schedule E workpaper.
Decision support
Basis tracking context for depreciation recapture planning and disposition analysis.
Depreciation schedule
Year-by-year schedule ready to move into a tax file or basis tracking workpaper.
Residential rental uses 27.5-year straight-line; commercial (nonresidential) rental uses 39-year straight-line.
First-year and last-year depreciation are prorated using the IRS mid-month convention based on month placed in service.
Land value is excluded from the depreciable basis. The tool separates land from the depreciable building portion automatically.
See adjusted basis after each year of depreciation - critical for calculating gain or loss at disposition.
Guide Below The Tool
How to use the rental property depreciation schedule well
A rental property depreciation schedule applies IRS straight-line depreciation over 27.5 years (residential) or 39 years (commercial) with mid-month convention to calculate annual deductions and remaining adjusted basis.
Rental property owners, real estate CPAs, tax preparers, and investors tracking basis for future disposition planning.
Correctly separating land from building value and using the actual month placed in service are the two inputs that most commonly produce errors on real property schedules.
Workflow
Four practical steps
1
Determine the land vs. building allocation.Use the county assessor's land-to-improvement ratio, an appraisal allocation, or purchase price allocation from the settlement statement.
2
Add any acquisition costs and improvements to the depreciable basis.Capitalized acquisition costs and improvements increase the depreciable basis of the structure, not the land.
3
Select property type and enter the month placed in service.Residential rental is 27.5-year property. Commercial rental (including mixed-use where commercial income exceeds 80%) is 39-year property.
4
Review the schedule and track accumulated depreciation each year.Accumulated depreciation reduces adjusted basis. At sale, this amount is subject to depreciation recapture at up to 25% (Section 1250 unrecaptured gain).
Document the basis for the land allocation - assessor records, appraisal, or cost segregation study. IRS may challenge allocations that are not supported.
Capital improvements are added to basis and depreciated. Repairs and maintenance are expensed currently. The distinction affects both the depreciation schedule and Schedule E.
For properties with large depreciable bases, a cost segregation study can reclassify portions of the structure to shorter-life classes for faster depreciation.
The mid-month convention means the first year's deduction is partial. The remaining fraction carries into the final year of the schedule.
Rental depreciation deductions are generally passive losses. Active participation and AGI phase-out rules may limit the current deductibility.
Inherited properties receive a stepped-up basis at the date of death, resetting the depreciation schedule entirely.
The functional tool stays on top so users can solve the immediate depreciation question before reading a guide.
First-year proration based on month placed in service is applied automatically - one of the most common manual errors on real property schedules.
Ledger Summit can build a full property basis tracker or cost segregation workflow later, but this page delivers value now.
FAQ
Rental Property Depreciation Schedule questions, answered directly
Residential rental property is depreciated over 27.5 years using the straight-line method under MACRS. The mid-month convention applies to the year the property is placed in service.
No. Land is not depreciable. Only the building and improvements can be depreciated. The land value must be separated from the total property cost to determine the depreciable basis.
Under the mid-month convention, real property is treated as placed in service in the middle of the month. This reduces the first-year depreciation deduction based on the month of acquisition.
No. The calculator runs entirely in your browser and does not send any data to a server.
Next Step
Need this connected to a broader workflow?
Use the free browser tool first. If you need a full property basis tracker, cost segregation analysis, or integrated depreciation reporting, Ledger Summit can build the next layer.
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