Commercial Building (Nonresidential Real Property) Depreciation Calculator
IRS MACRS depreciation calculator for commercial buildings, office buildings, retail stores, and other nonresidential real property. 39-year straight-line recovery.
Year 1 Deduction
$2,457
Recovery Period
39 years
Total Depreciation
$102,457
Method
Straight-Line
Year
Rate
Deduction
Cumulative
1
2.46%
$2,457
$2,457
2
2.56%
$2,564
$5,021
3
2.56%
$2,564
$7,585
4
2.56%
$2,564
$10,150
5
2.56%
$2,564
$12,714
6
2.56%
$2,564
$15,278
7
2.56%
$2,564
$17,842
8
2.56%
$2,564
$20,406
9
2.56%
$2,564
$22,970
10
2.56%
$2,564
$25,534
11
2.56%
$2,564
$28,098
12
2.56%
$2,564
$30,662
13
2.56%
$2,564
$33,226
14
2.56%
$2,564
$35,791
15
2.56%
$2,564
$38,355
16
2.56%
$2,564
$40,919
17
2.56%
$2,564
$43,483
18
2.56%
$2,564
$46,047
19
2.56%
$2,564
$48,611
20
2.56%
$2,564
$51,175
21
2.56%
$2,564
$53,739
22
2.56%
$2,564
$56,303
23
2.56%
$2,564
$58,868
24
2.56%
$2,564
$61,432
25
2.56%
$2,564
$63,996
26
2.56%
$2,564
$66,560
27
2.56%
$2,564
$69,124
28
2.56%
$2,564
$71,688
29
2.56%
$2,564
$74,252
30
2.56%
$2,564
$76,816
31
2.56%
$2,564
$79,380
32
2.56%
$2,564
$81,944
33
2.56%
$2,564
$84,509
34
2.56%
$2,564
$87,073
35
2.56%
$2,564
$89,637
36
2.56%
$2,564
$92,201
37
2.56%
$2,564
$94,765
38
2.56%
$2,564
$97,329
39
2.56%
$2,564
$99,893
40
2.56%
$2,564
$102,457
IRS Classification
IRS Asset Class: GDS 39-year Straight Line (Nonresidential Real Property)
Section 179: Not EligibleBonus Depreciation: Not Eligible
Key Tax Facts
Nonresidential real property is 39-year straight-line — no accelerated methods
Mid-month convention applies — placed in service month determines first-year deduction
Only the building is depreciable — land must be allocated and excluded
Section 179 available for HVAC, roofing, fire protection, and security improvements only
Cost segregation studies can reclassify components for faster depreciation
Structural components are part of the 39-year building
What This Covers
Office buildings
Retail stores and shopping centers
Warehouses
Manufacturing facilities
Hotels and motels
Medical office buildings
Restaurant buildings
Common Questions
Nonresidential real property (commercial buildings) is depreciated over 39 years using the straight-line method and mid-month convention. Annual depreciation = (building cost minus land) ÷ 39. A $1,000,000 building on $200,000 of land depreciates at $20,513/year ($800,000 ÷ 39).
The mid-month convention treats all property as placed in service in the middle of the month, regardless of the actual date. A building placed in service in March gets 9.5 months of depreciation in year 1 (March 15 through December 31).
Cost segregation studies are generally worthwhile for commercial buildings over $1 million in cost. A study identifies components (flooring, lighting, land improvements, personal property) that can be depreciated faster than 39 years — generating significantly larger early-year deductions.
27.5-year applies to residential rental property (apartments, single-family rentals). 39-year applies to all other business real estate (offices, retail, warehouses, restaurants). The determining factor is whether 80% or more of the building's gross rental income comes from residential rents.
Tax disclaimer: This calculator provides estimates based on standard IRS MACRS rules from Publication 946. Your actual depreciation deduction may differ based on business-use percentage, the mid-quarter convention, state tax conformity, bonus depreciation phase-outs, and other factors specific to your situation. Always consult a licensed CPA or tax professional before making tax decisions.