Depreciation Calculator

Key Takeaways

• Depreciation Calculator estimates recovery period of 27.5 years and year-1 bonus depreciation of $0 for this scenario.
• Depreciation does not start when you close — it starts when the property is placed in service, and the IRS mid-month convention (IRC §168(d)(2)) treats property placed in service during any month as if it entered service at that month's midpoint. A $250,000 residential building depreciates at $9,091 per full year, but a December placed-in-service date — treated as December 15 — counts only 0.5 months of the 12: a factor of 0.5/12.
• Property placed in service in December is treated as placed in service on December 15, so Year 1 counts 0.5 of 12 months: $379 on $250,000 instead of $9,091. The rest shifts to a partial 28th year — you lose timing, not the deduction itself.

Calculation Output

Result Chart

Key Facts

How This Estimate Works

• Depreciation does not start when you close — it starts when the property is placed in service, and the IRS mid-month convention (IRC §168(d)(2)) treats property placed in service during any month as if it entered service at that month's midpoint. A $250,000 residential building depreciates at $9,091 per full year, but a December placed-in-service date — treated as December 15 — counts only 0.5 months of the 12: a factor of 0.5/12.
• That makes the Year-1 deduction on this $250K basis just $379 — versus $9,091 for a January placed-in-service date on the straight-line page. You did not lose the depreciation; the unclaimed $8,712 shifts into a partial 28th year. But you did lose the time value: the deduction you wanted for this year's return mostly isn't in this year's return.
• This is why October is the planning window for calendar-year taxpayers. To claim a current-year deduction, the asset must be placed in service by December 31 — but a December 20 closing buys almost nothing for this year while a November or earlier date buys a meaningfully larger Year-1 slice (November counts 1.5/12, October 2.5/12). If you are choosing between closing this year and next, the mid-month math is the tiebreaker most investors never run: a December closing can defer nearly the entire first year of deductions into next year's return.
• The convention cuts both ways at the end of the recovery period. When you sell or the property is fully depreciated, the disposition month gets the same midpoint treatment — you get a half-month of depreciation in the month of sale. It is a small number, but it is the kind of detail that separates a hand-built depreciation schedule from a spreadsheet that just divides by 27.5.
• Compare this page against the straight-line variant for the same $250K basis to see timing alone move the Year-1 deduction by an order of magnitude with nothing else changed. This is a planning estimate, not an engineered cost-segregation study and not tax advice. Bonus depreciation eligibility turns on the acquisition date — the property must have been acquired after January 19, 2025 for the restored 100% bonus — and state treatment of federal expensing often differs. A filing-grade answer needs a CPA who knows your return.

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