U.S. · Tax forms
Schedule E line 18, depreciation or depletion.
The rental line that needs a land versus building split.
Line 18 is the “Depreciation expense or depletion” for each rental or royalty property. Figure the amount with the Instructions for Form 4562, and attach Form 4562 only if you are claiming depreciation on property first placed in service in 2025, depreciation on listed property, or a section 179 or amortization deduction that began in 2025. Land is not depreciable.
Look up a line item
Result
Line 18 rules (2025 instructions and form)
| Item | Meaning | What the IRS says |
|---|---|---|
| Line 18 | Depreciation expense or depletion | Entered per property in columns A, B and C |
| Line 23d | Total of line 18 for all properties | Enter it even if you have only one property |
| Starts | When depreciation begins | When the property is available and ready for use in your business or for producing income |
| Ends | When depreciation stops | When you deduct all your depreciable cost or basis, or no longer use the property for business or income |
| Form 4562 | When to attach | Property first placed in service during 2025; listed property (including a vehicle) regardless of date; section 179 or amortization that began in 2025 |
| Land | Depreciable? | No; split the cost between land and buildings |
| Depletion | Mineral property | Oil and gas wells, mines and other natural deposits may allow a depletion deduction (section 614) |
Splitting land from buildings
If you buy buildings and the price includes the land under them, divide the cost between land and buildings to get the basis for depreciation. Each asset’s share is the ratio of its fair market value to the fair market value of the whole property when you bought it. If you are not sure of the values, the instructions say you can divide the cost using assessed values for real estate tax purposes.
Repairs versus improvements
The instructions treat repairs and maintenance (for example, fixing a broken lock or painting a room) as deductible on line 14, and improvements (for example, replacing an entire HVAC system) as costs that must generally be capitalized and depreciated, which leads back to line 18.
Where to read more
The instructions point to Pub. 527 for depreciation of residential rental property and Pub. 946 for a more comprehensive depreciation guide. The yearly percentage and the recovery period come from those IRS publications and Form 4562, not from this page.
Worked example (the land split only)
Dana buys a rental for $300,000. The county assessed values are $60,000 for the land and $240,000 for the building, so the building is 80% of the total. Using the assessed-value method the instructions allow, the cost allocated to the building is $240,000 and the land’s $60,000 is not depreciated. The yearly amount would then come from Form 4562 and Pub. 527. Names and figures are made up, and closing-cost adjustments are ignored.
More line pages in this set
Related lines: Schedule E Line 19, Schedule E Line 16.
Sources
- Instructions for Schedule E (Form 1040) (2025): Line 18 instructions and the general instructions for lines 5 through 21. Page last reviewed or updated April 30, 2026. Read November 2, 2026.
- Schedule E (Form 1040) (2025): The printed line 18 and line 23d wording. Read November 2, 2026.
Tax year 2025 instructions (page last reviewed or updated April 30, 2026). The line labels were read from the Schedule E (Form 1040) PDF the IRS had posted on the date read, which is the 2025 edition; line numbers can shift between years, so check them against the form for your tax year. Names and figures in worked examples are made up.
Frequently asked questions
What is Schedule E line 18?
The depreciation expense or depletion for each rental or royalty property.
Do I always attach Form 4562 for rental depreciation?
No. The instructions say to attach it only for property first placed in service in 2025, listed property, or a section 179 or amortization deduction that began in 2025.
Can I depreciate land?
No. The instructions say land is not depreciable, so you divide the purchase cost between land and buildings.
What if I do not know the land and building values?
The instructions say you can divide the cost based on assessed values for real estate tax purposes.
Where is the total of line 18 for all my properties?
On line 23d, which asks for the total of all amounts on line 18 for all properties, even if you have only one.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. A CPA or an enrolled agent can confirm what a line means for your return. Everything runs in your browser; nothing you enter is sent anywhere.