Minnesota Depreciation Calculator

Real estate depreciation lets you deduct the cost of a building over its useful life — 27.5 years for residential property. Pre-filled with Minnesota median property value of $354,000.

Market

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Property Details

Property Type

Purchase Price

Land Percentage($70,800 land)

Capital Improvements

Tax & Timeline

Marginal Tax Rate

Years Held

Depreciation Schedule

$10,298$10,298 total

$10,298$20,596 total

$10,298$30,895 total

$10,298$41,193 total

$10,298$51,491 total

$10,298$61,789 total

$10,298$72,087 total

$10,298$82,385 total

$10,298$92,684 total

$10,298$102,982 total

$10,298$113,280 total

$10,298$123,578 total

$10,298$133,876 total

$10,298$144,175 total

$10,298$154,473 total

$10,298$164,771 total

$10,298$175,069 total

$10,298$185,367 total

$10,298$195,665 total

$10,298$205,964 total

$10,298$216,262 total

$10,298$226,560 total

$10,298$236,858 total

$10,298$247,156 total

$10,298$257,455 total

$10,298$267,753 total

$10,298$278,051 total

$5,149$283,200 total

Minnesota Market Context

Avg Cap Rate

5.8%

Median Price

$354K

Property Tax

0.99%

Vacancy Rate

5.4%

Local Factors

-Minneapolis-St. Paul has strong corporate employment base (Fortune 500 HQs)
-Rent stabilization ordinance in St. Paul (passed 2021) affects investor returns
-Cold climate increases heating and winter maintenance costs

Sources

World Population Review – Median Home Price FL Probate Law – Property Tax Rates (ACS Data)The Hartford – Insurance Rates iPropertyManagement – Vacancy Rates

Annual Depreciation

$10,298

$858/mo

Solid Savings

Annual Tax Savings$2,472

Depreciable Basis$283,200

Building Value$283,200

Land Value$70,800

Useful Life27.5 years

Total Deductions Taken$10,298

Total Tax Savings$2,472

Years Remaining27 of 27.5

Land (Non-depreciable)$70,800

Depreciation Taken$10,298

Remaining Basis$272,902

What does this mean?

You're getting meaningful tax savings from depreciation. This phantom expense reduces your taxable rental income without costing you anything out of pocket.

How Real Estate Depreciation Works

Depreciation is one of the most powerful tax benefits of owning rental property. The IRS allows you to deduct the cost of a building (not land) over its useful life — 27.5 years for residential and 39 years for commercial property.

This is called straight-line depreciation because you take equal deductions each year. It's a "paper loss" — your property might be appreciating while you claim it's losing value. That phantom expense offsets rental income and reduces your tax bill.

Keep running the numbers

One calculator rarely tells the whole story.

Depreciation is the silent return in Minnesota. See how it compounds.

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