Free Commercial Depreciation Calculator
Calculate annual straight-line depreciation for commercial real estate over the 39-year recovery period.
Total Annual Depreciation
$26,410
Total Annual Depreciation vs Marginal Tax Rate
Commercial Property Depreciation
Commercial real estate (office, retail, industrial) uses a 39-year straight-line depreciation schedule for the building structure.
Building Depreciation
Annual Depreciation = (Purchase Price - Land Value) / 39
Tenant Improvements
Qualified leasehold improvements may be depreciated over 15 years using straight-line, which is faster than the 39-year building schedule.
Important Distinctions
Mid-Month Convention
The first and last years of depreciation use a mid-month convention, meaning you get a partial deduction based on the month placed in service.
Example Calculation
A $1,200,000 commercial building with $300,000 land value and $50,000 in tenant improvements. 35% tax rate.
- 01Depreciable basis: $1,200,000 - $300,000 = $900,000
- 02Annual building depreciation: $900,000 / 39 = $23,077
- 03Annual TI depreciation: $50,000 / 15 = $3,333
- 04Total annual depreciation: $23,077 + $3,333 = $26,410
- 05Annual tax savings: $26,410 x 35% = $9,244
- 06Monthly depreciation: $26,410 / 12 = $2,200.83