For Investors · Calculator

Estimate the first-year deduction on a portfolio purchase.

Change the purchase price, land allocation, cost segregation result, and your marginal rate. The calculator shows year-one depreciation and what it could be worth if the loss is usable against your income. It is an estimate for planning conversations, not a tax projection.

Inputs
Total for all doors, closed together.
Land is not depreciable. Michigan SFR typically runs 10 to 25%.
Share of depreciable basis moved to 5-, 7-, and 15-year property. Single-family rentals commonly land at 20 to 30%.
Bonus depreciation is not prorated. Regular depreciation on the structure uses the mid-month convention.
Michigan's flat individual rate is 4.25%. Change it if you file elsewhere.
Year-One Estimate
Depreciable basis—
Bonus-eligible components—
Bonus depreciation (100%)—
Regular depreciation on structure—
Total year-one depreciation—
Deduction as % of purchase price—
Combined marginal rate—
Potential tax value if fully usable—
Years 2+ annual depreciation (structure)—

"Fully usable" means the loss offsets income taxed at your marginal rate, which requires real estate professional status or another exception for W-2 and practice income. Otherwise the deduction shelters the portfolio's own rental income and other passive income, and carries forward. Depreciation reduces basis and is recaptured on a taxable sale. See who can use the loss.

How the math works. Depreciable basis = price × (1 − land %). Bonus-eligible components = depreciable basis × cost segregation %, deducted 100% in year one under current law for property acquired and placed in service after January 19, 2025. The remaining structure depreciates straight-line over 27.5 years using the mid-month convention, so a March placed-in-service date yields 9.5 months in year one. The calculator ignores closing costs (which add to basis), the 15-year component's own depreciation after year one, state conformity differences, the excess business loss limitation, and the net investment income tax. Your CPA's projection will differ. Offer Now Michigan is not a tax advisor.
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