Cost Basis and Depreciation
Set purchase price, land value, in-service date, and depreciation method so your year-end Schedule E picture is accurate.
The Cost basis (depreciation) card captures what you paid for the property and when you started using it as a rental. These inputs flow into the year-end Schedule E summary and help your accountant calculate the annual depreciation deduction.
This is general information, not tax advice. Confirm the right approach for your situation with a qualified accountant or tax professional.
Purchase price
The total amount you paid to acquire the property. This is the starting point for the cost basis calculation.
Land value
The portion of the purchase price that represents the land itself. Land is not depreciable — only the building and improvements qualify. Subtracting land value from the purchase price gives the depreciable basis:
Depreciable basis = Purchase price − Land value
Your accountant or the county property assessment can help you determine a reasonable land/improvement split.
In-service date
The date the property was placed in service as a rental — typically when it was first available to rent or when the first tenant moved in. This date starts the depreciation clock. The IRS uses it to determine which tax year depreciation begins and how any partial-year amount is calculated.
Manual annual depreciation
Leave this blank and Rental Command calculates depreciation automatically using the straight-line method: depreciable basis ÷ 27.5 years (the IRS recovery period for residential rental property).
Fill it in only if you have a CPA-prepared depreciation schedule with a different figure — for example, when you're using a cost segregation study or the property was acquired mid-year with a specific partial-year amount. Entering a value here overrides the automatic calculation for every year.
Accumulated depreciation to date
Once the in-service date and basis are set, the property page shows Accumulated depreciation to date — the running total claimed through the current year using whichever method is active. Use this as a quick cross-check when reconciling with your accountant's depreciation schedule at year-end.