Depreciation calculator

Straight-line spreads the depreciable base evenly over useful life. It is the default in this calculator and the basis for the rental preset.

When teams choose straight-line:

• Financial reporting when you want stable, predictable expense each year
• Internal budgets where simplicity beats acceleration
• Rental property estimates when you use the 27.5-year preset as a planning shortcut

Declining balance applies a fixed rate to declining book value each period, so early-year expense is higher than straight-line. The factor scales the rate: 2 = double declining balance (200%), 1.5 = 150% declining balance. Set factor = 2 for the common DDB shortcut.

Accelerated depreciation can match assets that deliver more economic benefit early (technology, vehicles on the books). Tax filings may still require MACRS even when books use DDB—see book vs tax depreciation below.

SYD is another accelerated method: each year uses a shrinking fraction of the depreciable base based on remaining life. Unlike declining balance, the pattern is fixed in advance—you do not apply a rate to book value each period.

SYD is useful when you want acceleration without tuning a declining-balance factor, or when your policy or coursework specifies sum-of-years' digits explicitly.

Use these figures to check the math against your inputs (full-year periods unless noted):

• Straight-line: $18,000 cost, $3,000 salvage, 5 years → $3,000/yr; book value after 5 years → $3,000
• Half-year (same SL inputs): first period → $1,500
• Pro-rata months: same SL asset placed Aug 1 → 5 months in year 1 → about $1,250 (5/12 × $3,000)
• DDB (factor 2): $10,000 cost, $1,000 salvage, 5 years → year 1 $4,000; year 2 expense on $6,000 book → $2,400
• SYD: $10,000 cost, $1,000 salvage, 5 years → year 1 $3,000, year 2 $2,400
• Vehicle preset: $32,000 cost, $2,000 salvage, 6-year DDB—open the chip to see accelerated year-one expense
• Rental preset: $250,000 purchase, $50,000 land → $200,000 basis over 27.5 years → about $7,273/yr straight-line

Tap the preset chips above the inputs or enter your own numbers—the schedule and chart update instantly.

When you place an asset in service mid-year, the first accounting period is often prorated. Open Advanced to choose a convention and (when required) a placed-in-service date in YYYY-MM-DD format:

• Half-year — first period = 50% of a full year's expense (no date required)
• Pro-rata months — months remaining in the placement year ÷ 12. Asset placed August 1 → five months in the first year → 5/12 of annual SL expense.
• Exact days — days from placement through December 31 ÷ days in that calendar year (leap years included).

Set Years elapsed to the period you care about (for example year 2) after you pick a convention—the main result reflects that period, not just the first year.

IRS MACRS uses its own conventions and tables—use IRS Publication 946 and your CPA for tax returns.

Salvage value (residual value) is what you expect to recover when the asset is fully depreciated—scrap value, resale, or disposal proceeds. Depreciable base = cost − salvage. If salvage is $0, the entire cost is depreciated (common for computers with no expected resale).

Accumulated depreciation is the running total of expense recognized since acquisition. Book value (carrying amount) = cost − accumulated depreciation. The chart plots book value by period; the table shows expense, accumulated, and book value per line.

Mini example: $18,000 cost, $3,000 salvage, straight-line $3,000/year. After year 2, accumulated depreciation = $6,000 and book value = $12,000. After year 5, book value equals salvage ($3,000).

Use Years elapsed in Advanced to highlight depreciation and book value for a specific period (for example year 3 of a 5-year life).

Companies often record book depreciation for financial statements while claiming tax depreciation on the return. The two can differ in method, life, and convention—creating deferred tax entries in full accounting, which this tool does not model.

If you searched for a MACRS depreciation calculator, IRS rules use fixed recovery periods, conventions, and percentage tables—not the flexible straight-line, DDB, or SYD schedules on this page. Use this tool to learn the methods and export a planning schedule; use IRS Publication 946 and tax software for MACRS on a return.

Illustrative MACRS classes (simplified—see Pub 946 for asset lists):

• 5-year property — many computers, office equipment, autos (subject to limits)
• 7-year property — office furniture, fixtures, some machinery
• 27.5-year — residential rental buildings (structure)
• 39-year — nonresidential real property

Section 179 and bonus depreciation can let you deduct much or all of an asset's cost in the year placed in service—none of that is calculated here.

Use this page to build a clear straight-line, DDB, or SYD schedule for forecasts and teaching. For rental disposition and gain, pair with our capital gains tax calculator (depreciation recapture is not broken out).

Residential rental investors typically cannot depreciate land. Tax rules often treat the building as depreciable over 27.5 years (residential rental property) using a method such as straight-line under MACRS—commercial property commonly uses 39 years, which is not a preset here.

Cost segregation studies can reclassify portions of a building into shorter MACRS lives for tax purposes—that is beyond this simplified preset.

Pair with our cap rate calculator for NOI yield and real estate appreciation calculator for value growth—not a substitute for MACRS elections or CPA advice.

Depreciation applies to tangible property—equipment, buildings (structure), vehicles capitalized on the books. Amortization applies to intangible assets—patents, software capitalized for internal use, customer lists, and similar items with a defined life.

Quick comparison:

• Depreciation — physical assets; methods include straight-line, DDB, SYD (this calculator)
• Amortization — intangible assets; often straight-line over legal or useful life (not modeled here)
• Depletion — natural resources (oil, minerals)—out of scope
• Loan amortization — repayment of principal on debt, not asset expense

On an income statement, depreciation and amortization are sometimes grouped as D&A. The EBITDA calculator adds them back to approximate operating cash generation. For mortgage-style principal schedules, use the amortization schedule calculator.

There is no single best method for every asset. Book policy, industry norms, and tax law can all pull in different directions. Use this guide as a starting point—then confirm with your accountant.

• Straight-line — even expense each year; common for financial statements and the rental 27.5-year shortcut
• Declining balance / DDB — higher expense early; good when productivity or obsolescence is front-loaded (try factor 2 or the DDB preset)
• Sum-of-years' digits — predictable acceleration without a declining-balance factor; common in textbooks and some policies

For US federal income tax, MACRS may override your book choice on the return even when you use straight-line internally. Section 179 and bonus depreciation can further change the tax deduction in the acquisition year.

Run each method in the calculator above with the same cost, salvage, and life—compare schedules side by side by switching the method rail, then export the schedule you need for your model.

Many top results for “depreciation calculator” are car depreciation calculators (resale value, insurance, or trade-in curves). Those estimate market price, not the depreciation expense you record when a vehicle is a capitalized fixed asset on your books.

You can model a company vehicle here with cost, salvage, useful life, and declining balance or SYD. You cannot get Kelley Blue Book-style resale forecasts from this page.

For operating performance after D&A, use the EBITDA calculator.