Depreciation Math (Straight-Line)

Appraisal-style straight-line depreciation: annual depreciation = replacement cost ÷ useful life; accrued depreciation = annual × effective age. A $300,000-to-replace building with a 50-year life depreciates $6,000/year; at effective age 10 it has lost $60,000, so its depreciated value is $240,000 — add land separately. Tax-style cost recovery on RESIDENTIAL rentals uses 27.5 years on the IMPROVEMENTS only (39 for nonresidential): a $275,000 building deducts $10,000/year regardless of land. Exam cues: 'effective age' (condition-based) beats chronological age, land NEVER depreciates, and percent-good = 1 − (effective age ÷ useful life).