Depreciation Calculator

Key Takeaways

• Depreciation Calculator estimates recovery period of 27.5 years and year-1 bonus depreciation of $120,000 for this scenario.
• A $400,000 residential rental building (land excluded — land never depreciates) recovers its cost evenly over 27.5 years: $400,000 ÷ 27.5 = $130,182 per full year. That $130,182 is the baseline every other depreciation strategy is measured against — bonus depreciation, cost segregation, and the ADS election all start from this number and change its shape.
• $14,545 per full year on the 27.5-year residential schedule (land excluded). A partial first year under the mid-month convention is smaller — a December placed-in-service date yields only $606 in Year 1.

Calculation Output

Result Chart

Key Facts

How This Estimate Works

• A $400,000 residential rental building (land excluded — land never depreciates) recovers its cost evenly over 27.5 years: $400,000 ÷ 27.5 = $130,182 per full year. That $130,182 is the baseline every other depreciation strategy is measured against — bonus depreciation, cost segregation, and the ADS election all start from this number and change its shape.
• The "land excluded" qualifier does real work. If you bought the property for more than $400,000, the difference is land value (plus any non-depreciable closing costs allocated to land), and it earns no depreciation at all. Investors who skip the allocation step overstate their deduction from day one. The cost segregation calculator hub is the planning-estimate tool for splitting purchase price into land, building, and reclassifiable buckets.
• A January placed-in-service date is the full-year baseline in this calculator — the standard presentation of the schedule. (Strictly applied, the mid-month convention would count 11.5 months for January; the convention's bite is modeled precisely for February through December placements, which is the December variant page's entire lesson: the same $400K basis placed in service in December produces only $606 in Year 1.)
• Year 2 onward, the schedule is beautifully boring: $10,182 every year until the basis is recovered. Five years of straight-line deductions total $170,909. The strategy question is never whether to take this deduction — it is whether to reshape it: the bonus variant page shows how a cost-seg split plus 100% bonus turns this same $400K basis into a $130,182 Year-1 deduction, and the ADS page shows what the 30-year election costs.
• At a 24% marginal rate, the straight-line Year-1 deduction saves $31,244 in tax. Modest — which is exactly why the reshaping strategies exist. 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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