Straight-Line Method of Depreciation

Determines the equal annual depreciation allowed in a straight line from the adjusted basis to zero and computed by dividing the adjusted basis by the estimated years remaining of economic life.

Recovery of an investor’s property cost down to zero over 27.5 years (residential) or 39 years (non-residential). Divide the value of an income property by 27.5 (or 39), then deduct that amount on income tax each year.

Depreciation also reduces the adjusted basis of the building.