Depreciation in the Year You Sell an Asset

• Half-year: half of the year's depreciation.
• Mid-quarter: treated as disposed of in the middle of the quarter.
• Mid-month (real property): months up to the middle of the month of sale.
• Property placed in service and disposed of in the same year gets no depreciation.

Example from Pub 946: residential rental property with $100,000 basis, depreciated at 3.636% a year, sold in March: 2.5/12 × 3.636% × $100,000 = 757.50.

The tax gain is proceeds minus adjusted basis. For personal property, gain up to the depreciation taken is ordinary income (§1245 recapture). Assetroll shows both.

Last reviewed 2026-10-28. General information, not tax advice. IRS Publication 946, the Form 4562 instructions and your tax adviser decide what applies.