Depreciation Calculator

Estimate annual depreciation, the tax savings it generates, and what gets recaptured when you sell. Supports cost segregation and bonus depreciation.

Results

Y1 depreciation

$5,515

Annual SL (full year)

$10,182

Recapture at sale

$24,288

Building basis

$280,000

Cumulative deprec.

$97,152

Tax savings (cumulative)

$31,088

Year-by-year

Year	Straight-line	Bonus	Total	Cumulative	Tax savings
Year 1	$5,515	$0	$5,515	$5,515	$1,765
Year 2	$10,182	$0	$10,182	$15,697	$3,258
Year 3	$10,182	$0	$10,182	$25,879	$3,258
Year 4	$10,182	$0	$10,182	$36,061	$3,258
Year 5	$10,182	$0	$10,182	$46,242	$3,258
Year 6	$10,182	$0	$10,182	$56,424	$3,258
Year 7	$10,182	$0	$10,182	$66,606	$3,258
Year 8	$10,182	$0	$10,182	$76,788	$3,258
Year 9	$10,182	$0	$10,182	$86,970	$3,258
Year 10	$10,182	$0	$10,182	$97,152	$3,258

How real estate depreciation works

The IRS lets you deduct the cost of an income-producing building (not the land) over a fixed recovery period: 27.5 years for residential rentals, 39 years for commercial property. Year 1 uses the mid-month convention — your deduction is scaled to (12.5 − month placed in service) / 12 of a full year.

Cost segregation breaks the basis into shorter-life buckets (5, 7, 15 years), which can be bonus-depreciated. Bonus % is set by Congress and phases down: 60% in 2024, 40% in 2025, 20% in 2026, 0% in 2027 unless extended.

When you sell, the IRS recaptures the depreciation you took at up to 25% (the §1250 rate). This is why the recapture column matters: it's a tax bill you owe at sale, regardless of your basis position.

Depreciation Calculator

Results

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How real estate depreciation works