Depreciation Method Comparison (First 5 Years)
Straight-Line
Accelerated (150% DB)
Tax Savings Difference
Understanding Real Estate Depreciation Methods
Straight-Line Depreciation
The standard method spreads depreciation evenly over 27.5 years for residential rental properties, as per IRS guidelines.
150% Declining Balance Method
An accelerated method that provides larger deductions in early years, decreasing over time. This method is allowed by the IRS for residential rental properties.
Important Considerations
- Land value must be excluded from depreciation calculations
- Different property types may have different depreciation periods
- Consultation with a tax professional is recommended
- Results from this calculator are estimates for comparison only
About This Calculator
This calculator helps you compare two IRS-approved depreciation methods. It shows:
- Year-by-year depreciation amounts
- Estimated tax savings based on your tax rate
- Five-year comparison between methods
Note: This is a calculation tool only and should not be considered tax advice.
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