Accumulated Depreciation

Total depreciation deducted over the actual ownership period, based on the purchase date.

Example Result

Sample Data

$11,200

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Accumulated Depreciation Formula

Cumulative Annual Depreciation ÷ 12 × Months Owned $11,200

What This Means

A sample property priced at $385,000 with $2,850/month rent has a accumulated depreciation of $11,200 at Purchase (Month 0). Accumulated depreciation reduces your adjusted cost basis, which increases your taxable gain when you sell. It also determines the depreciation recapture tax you will owe. Using actual years owned instead of a fixed 5-year projection gives you the real number for tax planning and True Net Equity™ calculations.

Where This Value Comes From

Accumulated Depreciation is not entered directly — it is calculated from Depreciation and Years Owned. See the formula breakdown above and the detailed inputs below.

Inputs That Determine Accumulated Depreciation

Depreciation

Annual straight-line depreciation deduction for the building.

$11,200

Purchase

Years Owned

Time elapsed since the property was purchased, calculated from the purchase date to today.

N/A

Purchase

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Why It Matters

Accumulated depreciation reduces your adjusted cost basis, which increases your taxable gain when you sell. It also determines the depreciation recapture tax you will owe. Using actual years owned instead of a fixed 5-year projection gives you the real number for tax planning and True Net Equity™ calculations.

Detailed Explanation

Accumulated Depreciation calculates the total straight-line depreciation you have claimed on a property from the purchase date through today. Residential rental properties are depreciated over 27.5 years, so each year the depreciable basis (purchase price minus land value) generates a fixed annual deduction.\n\nThis metric uses your actual ownership duration rather than a fixed projection like "Year 5." If you have owned a property for 3.2 years, it shows 3.2 years of accumulated depreciation. This matters for accurate calculations of adjusted basis, capital gains tax, and depreciation recapture when selling.