Rental Property Depreciation Calculator

See your annual depreciation deduction, the tax it shields each year, and the depreciation recapture you would owe when you sell.

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Annual depreciation

$11,636

Annual tax shielded

$3,724

Depreciable building basis$320,000
Total depreciation over 10 years$116,364

At sale

Adjusted basis after depreciation$283,636
Total gain$216,364
Depreciation recapture tax (25%)$29,091

You can defer this recapture with a 1031 exchange instead of paying it at sale.

Informational and educational only, not tax advice, and no accountant-client relationship is created. Estimates use simplified assumptions and do not reflect your specific situation. Verify current tax law and consult your CPA before filing.

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Cost segregation calculatorAccelerate depreciation into year one1031 exchange calculatorDefer recapture when you sellSingle-family rental calculatorFull underwriting including tax benefits

Frequently asked questions

How is rental property depreciation calculated?

You depreciate the building portion of your basis, not the land, in equal amounts over 27.5 years for residential rental property or 39 years for commercial. So a 400,000 dollar property with 20 percent land has a 320,000 dollar building basis and deducts about 11,600 dollars a year.

What is depreciation recapture?

Depreciation reduces your basis, so when you sell, the gain attributable to depreciation you took is taxed as unrecaptured Section 1250 gain, at a rate up to 25 percent. This calculator estimates that recapture from your years held and sale price.

Can I avoid depreciation recapture?

You can defer both the recapture and the capital gains with a 1031 exchange into another investment property. The tax is deferred, not erased, until you eventually sell without another exchange. You cannot skip depreciation to avoid recapture; the IRS recaptures depreciation allowed or allowable.

Is this calculator tax advice?

No. It is an educational estimate using straight-line assumptions and a simplified recapture calculation. Confirm the figures with a CPA before relying on them.