Calculate IRS tax write-offs for residential property using MACRS 27.5-year straight line.
Depreciable Basis
$280,000
Land Value (Excluded)
$70,000
Full Year Write-Off
$10,182
Est. Lifetime Tax Savings
$67,210
| Year | Calendar Year | Depreciation Deduction | Tax Savings (24%) | Remaining Basis |
|---|---|---|---|---|
| Year 1 | 2026 | $7,212 | $1,731 | $272,788 |
| Year 2 | 2027 | $10,182 | $2,444 | $262,606 |
| Year 3 | 2028 | $10,182 | $2,444 | $252,424 |
| Year 4 | 2029 | $10,182 | $2,444 | $242,242 |
| Year 5 | 2030 | $10,182 | $2,444 | $232,061 |
| Year 6 | 2031 | $10,182 | $2,444 | $221,879 |
| Year 7 | 2032 | $10,182 | $2,444 | $211,697 |
| Year 8 | 2033 | $10,182 | $2,444 | $201,515 |
| Year 9 | 2034 | $10,182 | $2,444 | $191,333 |
| Year 10 | 2035 | $10,182 | $2,444 | $181,152 |
| Year 11 | 2036 | $10,182 | $2,444 | $170,970 |
| Year 12 | 2037 | $10,182 | $2,444 | $160,788 |
| Year 13 | 2038 | $10,182 | $2,444 | $150,606 |
| Year 14 | 2039 | $10,182 | $2,444 | $140,424 |
| Year 15 | 2040 | $10,182 | $2,444 | $130,242 |
| Year 16 | 2041 | $10,182 | $2,444 | $120,061 |
| Year 17 | 2042 | $10,182 | $2,444 | $109,879 |
| Year 18 | 2043 | $10,182 | $2,444 | $99,697 |
| Year 19 | 2044 | $10,182 | $2,444 | $89,515 |
| Year 20 | 2045 | $10,182 | $2,444 | $79,333 |
| Year 21 | 2046 | $10,182 | $2,444 | $69,152 |
| Year 22 | 2047 | $10,182 | $2,444 | $58,970 |
| Year 23 | 2048 | $10,182 | $2,444 | $48,788 |
| Year 24 | 2049 | $10,182 | $2,444 | $38,606 |
| Year 25 | 2050 | $10,182 | $2,444 | $28,424 |
| Year 26 | 2051 | $10,182 | $2,444 | $18,242 |
| Year 27 | 2052 | $10,182 | $2,444 | $8,061 |
| Year 28 | 2053 | $8,061 | $1,935 | $0 |
Real estate depreciation is a non-cash tax deduction that allows property owners to write off the cost of purchasing residential rental property over 27.5 years. According to IRS rules, land cannot be depreciated, which is why you must subtract the land value from your purchase price to establish your depreciable basis.
Residential property is depreciated using the Modified Accelerated Cost Recovery System (MACRS) straight-line method. The first year of depreciation is prorated based on the month the property was placed in service (the "mid-month convention").