Property Depreciation Calculator: Real Estate
Calculator Use
Use this calculator specifically to calculate and print depreciation schedules of residential rental or nonresidential real property related to IRS form 4562 lines 19 and 20. It assumes MM (mid month convention) and S/L (straight-line depreciation). This calculator calculates depreciation by a formula. The IRS also allows calculation of depreciation through table factors listed in Publication 946 linked below. Applicable for MACRS.
Inputs
- Cost Basis
- the original value of your property or the depreciable cost
- Recovery Period
- the number of years during which the cost basis of an item of property is recovered
- Placed in Service
- select the month and enter the year the asset started being used for its intended purpose
- Year
- enter 1 or 4 digits; enter a four digit year to use your actual years OR enter a 1 to list years using digits 1 through the last year
Sample Full Depreciation Schedule
Cost Basis: $500,000.00, Life: 10 years,
Placed in Service: 8/2012, First Year: 4.5 months, Last Year: 7.5 months
Period Start
Expense
Depreciation
Period End
About this Calculator
If you need a Recovery Period that is not shown please contact us to add it. The drop down menu is used to list the common values.
Some use this calculator for figuring depreciation under MACRS.
Real Estate Property Depreciation
The core calculation is for straight line depreciation, as the name suggests, it is a straight line drop in asset value. The depreciation of an asset is spread evenly across the life.
This calculator is specific for property that is real estate. The key difference from normal straight line depreciation is that a mid month convention is used in calculating depreciation in the first and last years. That is, only 1/2 month of depreciation is calculated for the months the property was put into or taken out of service.
With real estate the total cost basis is depreciated so there is no salvage value.
- Depreciation in Any Full year = Cost / Life
- Partial year depreciation, when the property was put into service in the M-th month is taken as:
- First year depreciation = (((12-M)+0.5) / 12) * (Cost / Life)
Tax Forms/ Reference
Form 4562 IRS 2009 Depreciation and Amortization (Including Information on Listed Property)
Inst 4562 IRS 2009 Instructions for Form 4562, Depreciation and Amortization
Publ 946 IRS Publication: How to Depreciate Property
Turbo Tax Documentation: Real Estate Tax and Rental Property: How do I calculate depreciation?