Rental Property Depreciation Calculator (2026): Land Split, 27.5-Year Mid-Month Schedule and Depreciation at Sale

Where each default in the calculator comes from

A calculator is only as good as the numbers you type in, so here is the source of every default. The tax rules inside it are the IRS’s; the property is the IRS’s own example where one exists.

Change the land method, the property type, the dates and the improvements and every table below is recomputed. Nothing you type leaves your browser.

The math, step by step

1. Cost basis. Price plus the settlement costs that belong in basis. Publication 527 (2025) says these closing costs are part of your basis: abstract fees, charges for installing utility services, legal fees, recording fees, surveys, transfer taxes, title insurance, and amounts the seller owes that you agree to pay. It says these are not: fire insurance premiums, rent for occupancy before closing, charges for getting or refinancing a loan (points, origination fees, assumption fees, a credit report, a lender-required appraisal) and amounts placed in escrow for taxes and insurance. The calculator’s field is for the first list only.

2. Take out the land. Land is not depreciable: IRS Topic no. 704 says “Land is never depreciable”, and Treas. Reg. 1.167(a)-2 says the allowance does not apply “to land apart from the improvements or physical development added to it”. Publication 527 tells you how to split a combined price: the share of each asset is the ratio of its fair market value to the whole, and if you are not certain of the values you can use assessed values for real estate tax purposes. In its example a $200,000 purchase with a $24,000 land assessment in a $160,000 total gives 15% to land ($30,000) and 85% to the house ($170,000). The calculator offers three ways: that assessor ratio, a percentage, or a dollar amount from an appraisal. It applies the ratio or percentage to the price plus the closing costs you list (our convention; the IRS example has no closing costs). The assessor’s split is the fallback Publication 527 gives when you are not certain of the fair market values; fair market value comes first in the publication, and an appraisal is one way to document it (our reading).

3. Pick the table. A residential rental is a building where 80% or more of the gross rental income is from dwelling units (26 U.S.C. 168(e)(2)(A)); it takes 27.5 years. Nonresidential real property takes 39 years (26 U.S.C. 168(c)). Both are straight line (26 U.S.C. 168(b)(3)(A), (B)) and both use the mid-month convention (26 U.S.C. 168(d)(2)), which treats property placed in service during a month as placed in service on the middle of that month (26 U.S.C. 168(d)(4)(B)). You place property in service when it is ready and available for its specific use, not when you sign: Publication 946 says so, and Publication 527 uses the date a house is ready and available for rent.

4. First-year percentage. A full year of straight line is 100 ÷ 27.5 = 3.63636% of basis. In the first year the building is treated as in service from the middle of the month to December 31, which is (12.5 − month) ÷ 12 of a year. For February: (12.5 − 2) ÷ 12 = 0.875 of a year, and 0.875 × 3.63636% = 3.182%, the figure in Publication 946 Table A-6 and in Publication 527’s example, where $160,000 × 3.182% is $5,091. For the 39-year table the same logic gives 2.247% for February. The IRS prints the 39-year first-year figures as 0.107% × (25 − 2 × month), a step of 0.214 points a month; our formula uses that.

5. Middle years. 3.636% a year on the 27.5-year table for years 2 to 9. From year 10 the IRS alternates 3.637% and 3.636% (the Instructions for Form 4562 print the pattern as Table C: even years 10 to 26 and odd years 11 to 27, with the two flipping for months 7 to 12), so a row adds to exactly 100%. On the 39-year table it is 2.564% for years 2 to 39.

6. Last year. What is left. For a February placement that is 2.273% in recovery year 28 (2053 in the example); for a July to December placement year 28 is a full 3.636% and the table finishes in year 29 (0.152% for July, 1.667% for December). The calculator’s final year takes the basis that remains, so the schedule adds exactly to the basis: whole-dollar rounding of 28 years of table amounts leaves the example $3 short, and the last year is $3,867 against $3,864 from the printed percentage (our arithmetic).

7. Year of sale. Publication 946: if you dispose of property before the end of its recovery period, the deduction for that year is only part of a full year, figured with the convention that applies. For mid-month property the publication says: “Treat the month of disposition as one-half month of use.” Its example sells in March, multiplies the $3,636 full-year amount by 2.5 over 12 and gets $757.50. The calculator multiplies that year’s table amount by (sale month − 0.5) ÷ 12. Property placed in service and disposed of in the same year cannot be depreciated at all (Publication 946, excepted property), so the calculator shows zero if both dates fall in one year.

8. Improvements. Publication 527: “Treat additions or improvements you make to your depreciable rental property as separate property items for depreciation purposes.” The addition takes the property class and recovery period the original property would have if placed in service at the same time, and its recovery period starts on the later of its own placement date and the property’s. So a roof on a 27.5-year house is 27.5-year property with its own mid-month first-year percentage. Publication 946 defines an improvement as an addition to or partial replacement of property that is a betterment to the property, restores it or adapts it to a new or different use; the calculator’s fields are for amounts that meet that definition.

Worked example: the calculator’s defaults

A $200,000 purchase, $24,000 of land in a $160,000 assessment, no closing costs, residential, placed in service in February 2026, sold in June 2036. The 15% land share makes the land $30,000 and the building $170,000 (our arithmetic).

All amounts are our arithmetic: $170,000 × 3.182% = $5,409.40; × 3.636% = $6,181.20; × 3.637% = $6,182.90; and $170,000 × 3.636% × 5.5 ÷ 12 = $2,832.9 (each year rounded to the dollar). A plain 170,000 ÷ 27.5 would give $6,182 a year; the table’s $6,181 comes from the IRS’s printed percentage, which is what the table method produces.

The sale, and the unrecaptured section 1250 amount. Take a $240,000 sale price less $14,400 of selling costs (our assumptions): the amount realized is $225,600. Adjusted basis is the $200,000 cost minus the $63,873 of depreciation, $136,127. The gain is $89,473 (our arithmetic). The part of the gain that is “unrecaptured section 1250 gain” is the lesser of the gain or the depreciation, $63,873, because 26 U.S.C. 1(h)(6)(A) defines it as the gain that would be ordinary income if section 1250(b)(1) included all depreciation. The other $25,600 is ordinary long-term gain. If the amount realized is split 85/15 between building and land by the same ratio, the building’s own gain is $191,760 − $106,127 = $85,633, above its depreciation, so the split does not change the result (our arithmetic). Had the sale price been low enough that the gain fell below the depreciation, the unrecaptured amount would be the gain, and the calculator takes the lesser of the two. The Instructions for Form 4797 say section 1250 ordinary-income recapture does not apply to dispositions of MACRS 27.5-year and 39-year property placed in service after 1986, so in this example the whole $63,873 is in the unrecaptured layer and none of it is recapture at ordinary rates. What that layer costs in tax depends on your other income and is worked, with the 2026 brackets, on our depreciation recapture page; the cap there is 25%, and in that page’s own example (a different property, with $122,174 of depreciation, on a joint return) the 25% rate starts only when other taxable income passes $281,376.

The percentages by month: 27.5-year and 39-year

These are the IRS-printed numbers the calculator reproduces: the first-year and last-year percentages in Publication 946 Table A-6 (residential, 27.5 years) and Table A-7a (nonresidential, 39 years). A full year is 3.636% and 2.564%. The first and last years always add to one full year plus the half-month on each end, so a late-year placement has a small first year and a large last year.

For months 7 to 12 on the 27.5-year table, year 28 is a full 3.636% and the remainder falls in year 29. Per $100,000 of building basis, the first year is $3,485 for January and $152 for December on the 27.5-year table (our arithmetic). The same property costs less deduction as nonresidential: the default $170,000 building on the 39-year table would deduct $3,820 in 2026, $4,359 a year after, $45,049 by the June 2036 sale, against $63,873 on the 27.5-year table (our arithmetic). The property type follows the use of the building: under 26 U.S.C. 168(e)(2)(A)(ii) a “dwelling unit” does not include a unit in a hotel, motel or other establishment more than one-half of whose units are used on a transient basis. Our reading is that a short-term-rental building can end up on the 39-year side; that is a question for a preparer.

How we checked it. The calculator’s formula is the one in check_math.py, which reads Publication 946 from the copy we saved and compares its output with all 348 cells of Table A-6 (12 months by 29 years) and the 36 first, middle and last cells of Table A-7a: 384 of 384 match. The 3.636/3.637 alternation from year 10 is not explained in the publication; we copy the pattern printed in the tables and in Table C of the Form 4562 instructions, and the check proves it for every cell. The same script reproduces the IRS’s own examples: $160,000 × 3.182% = $5,091 and $147,000 × 1.364% = $2,005 in Publication 527, and the $757.50 sale-year amount in Publication 946.

How much you will have taken by year

If you hold the default $170,000 building through each year-end without selling, the accumulated depreciation is as follows (whole-dollar years, our arithmetic from Table A-6; the percentage is the sum of the printed table percentages):

Two practical readings. The deduction does not stop being “allowed” because you stopped taking it: 26 U.S.C. 1016(a)(2) reduces your basis by the depreciation allowed “but not less than the amount allowable”, and Publication 946 says that if you do not claim depreciation you are entitled to deduct, you must still reduce basis by the full amount allowable. So the accumulated figure is what the sale is measured against even if a past preparer skipped it. And a sale partway through a year takes only part of that year’s deduction, by the half-month rule in step 7.

A second scenario: closing costs and a roof

Same house, but $3,000 of title, recording and legal fees go into basis and the owner puts a $12,000 roof on in September 2029. The cost basis is $203,000; at 15% land, the land is $30,450 and the building $172,550. The roof is a separate 27.5-year asset whose first-year percentage for September is 1.061% (our arithmetic with the Table A-6 figures).

By the June 2036 sale the closing costs and the roof add $3,905 to the accumulated depreciation compared with the default ($67,778 against $63,873, our arithmetic). Adjusted basis is cost plus improvements minus depreciation, so the roof raises the depreciation and the basis together.

What the 2025 tax law changed, and what it did not

P.L. 119-21 (July 4, 2025) is the reason many readers wonder whether rental depreciation changed. For the building it did not. The recovery periods in 26 U.S.C. 168(c) are still 27.5 years for residential rental property and 39 years for nonresidential real property, the straight-line rule in 168(b)(3) and the mid-month rule in 168(d)(2) are unchanged in the Code text we read on October 7, 2026, and the mid-quarter test in 168(d)(3) still sets aside residential and nonresidential real property.

What the law did change is bonus depreciation. The Instructions for Form 4562 (2025) say P.L. 119-21 reinstated the 100% special depreciation allowance for certain qualified property acquired and placed in service after January 19, 2025. Qualified property under 26 U.S.C. 168(k)(2)(A)(i)(I) is property with a recovery period of 20 years or less, so a 27.5-year or 39-year building is outside it. What qualifies in a rental is the shorter-life property: the Instructions list “appliances, carpets, furniture, etc., used in a rental real estate activity” as 5-year property. A cost segregation study carves those and 15-year components out of the purchase price; our cost segregation guide reads the IRS audit guide and the statute on how that works, what it adds in year one, and what the 2025 law means for property bought before and after January 19, 2025. This calculator does not model bonus depreciation or any component split: its building is 100% of the depreciable basis, and its improvements are 27.5-year or 39-year like the building.

The law also added section 168(n), a 100% allowance for qualified production property: nonresidential real property used as an integral part of a qualified production activity. It does not help a landlord: the statute says property used by a lessee is not considered used by the taxpayer who is the lessor as part of a qualified production activity.

What this calculator does not do

• It does not compute the tax. It stops at depreciation and the unrecaptured amount. Rates, brackets, the 25% cap and the 3.8% net investment income tax are on our depreciation recapture page; the broader sale picture, including the long-term gain rates, is in our guide to capital gains tax on real estate.
• It does not do 5-year, 7-year or 15-year property, qualified improvement property on a nonresidential building (see 26 U.S.C. 168(e)(6)), or bonus depreciation. Appliances and carpet are 5-year property under the Form 4562 instructions.
• It does not do the alternative depreciation system. ADS uses a 30-year life for residential rental property placed in service after 2017 according to the Form 4562 instructions, and applies when you elect it or the law requires it; see Publication 946.
• It assumes a calendar-year taxpayer and a rental that is in service for the full year. Partial-year personal use, a home office or a vacation home needs the allocation rules in Publication 527.
• It does not handle a home converted to a rental. Publication 527 sets the basis at the lesser of fair market value or adjusted basis on the conversion date and treats the property as placed in service on that date; its example has a $147,000 house placed in service August 1, which takes 1.364% in year one, $2,005. Use the calculator with the lesser figure as the price and no land.
• It does not replace Form 4562 or your preparer. Property placed in service in the tax year goes on Form 4562, and the instructions tell you to enter “MM” for the mid-month convention, with residential rental property on line 19i and nonresidential real property on line 19j; the total depreciation goes on Schedule E, line 18 (Publication 527). If you own through a syndication or a crowdfunded partnership, your depreciation arrives on a Schedule K-1 instead; see our guide to real estate crowdfunding taxes.

What a landlord can do with this

• Run the calculator once with your actual dates and basis, and again with a different land share. The assessor ratio, a percentage and an appraisal can differ by several points of land, which changes the deduction roughly one-for-one with the building.
• Write down the land allocation and where it came from. A closing statement, an appraisal or the assessor’s notice; Publication 527 puts fair market value first and assessed value second.
• List each improvement with its date and cost. A roof, an addition or a new HVAC system is its own asset with its own mid-month start. Keep the invoices.
• Compare the schedule to your prior returns. If the depreciation you took differs from the schedule, ask a preparer whether a correction is needed before a sale, because the basis falls by the amount allowable. Publication 946 describes how to correct it.
• Before selling, put the accumulated depreciation and the expected gain into the recapture page’s worked method. A like-kind exchange can defer the gain; see our 1031 exchange rules guide for the deadlines.
• If you are still underwriting a purchase, the depreciation is only one line. Our rental property calculator covers the cash flow, cap rate and cash-on-cash side with sourced inputs for every state.

FAQ

Sources, read and saved on October 7, 2026: 26 U.S.C. 1, 168, 1016, 1245 and 1250 as published by the Legal Information Institute at Cornell; Treas. Reg. 1.167(a)-2 as published by the Electronic Code of Federal Regulations; Public Law 119-21 (July 4, 2025), section 70301; IRS Publication 946 (2025), How to Depreciate Property, including Tables A-6 and A-7a; IRS Publication 527 (2025), Residential Rental Property, including Table 2-2d; Instructions for Form 4562 (2025), the version dated March 30, 2026, with Table C; Instructions for Form 4797 (2025); and IRS Topic no. 704, last reviewed September 24, 2026. The default property is the IRS’s own Publication 527 example; the dates, the sale price and the selling costs are our assumptions, and every deduction, sum and gain in the examples is our arithmetic, reproduced by check_math.py. The calculator covers straight-line GDS depreciation of the building and its improvements only. This is analysis of public documents and the law, not tax, legal or investment advice.