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Depreciable Basis Calculator

Depreciable basis = cost of building + acquisition costs + improvements − land value. Land is NOT depreciable. This calculator sizes the correct depreciable amount for Schedule E. Cost segregation studies can further accelerate depreciation by reclassifying 5%-25% of a rental property's basis into 5, 7, or 15-year recovery classes (carpet, appliances, land improvements). Studies cost $4K-Depreciable basis = cost of building + acquisition costs + improvements − land value. Land is NOT depreciable. This calculator sizes the correct depreciable amount for Schedule E.0K but produce Depreciable basis = cost of building + acquisition costs + improvements − land value. Land is NOT depreciable. This calculator sizes the correct depreciable amount for Schedule E.0K-$80K of first-year depreciation acceleration on typical investment properties. Bonus depreciation through 2026 phases down 80% → 60% → 40% → 20% → 0% by 2027.

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27.5 residential, 39 commercial

Depreciable basis

$280,000

Annual depreciation

$10,182

First-year (mid-year convention)

$5,091

Land value (non-depreciable)

$64,000

Building value

$256,000

How the math works

$320K purchase, 20% land = $64K. $256K building + $9K acq + $15K improvements = $280K depreciable. Over 27.5 years = $10,182/yr annual depreciation.

Hire a CPA to do cost segregation on larger properties — accelerates depreciation by pulling specific components (appliances, flooring, fixtures) into shorter 5-15 year classes. Can double first-year depreciation.

How to Use

  1. Enter purchase price, land value (from tax assessor), acquisition costs, and improvements.
  2. See depreciable basis and annual depreciation.

Frequently Asked Questions

How do I find land value?

Property tax bill usually shows land/building split. Or appraisal. Or area typical: 20-30% land for urban, 10-20% for suburban SFR. Don't zero out land — IRS will audit.

27.5 or 39 years?

Residential rental: 27.5 years. Commercial: 39 years. MACRS applies, first year prorated based on month placed in service.

Improvements depreciate?

Yes, capital improvements (roof, HVAC, kitchen remodel) depreciate separately — 27.5 years each from date placed in service. Repairs are deducted as expense not capitalized.

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