Form 4562 Depreciation Explained — What Landlords Need to Know

TL;DR: Form 4562 is the IRS form where landlords report depreciation on rental property, appliances, and other capital assets. You file it the year you place an asset in service and any year you claim Section 179 or bonus depreciation. Keep a running depreciation schedule outside your tax return — you'll need it every year, not just the first.

_Last reviewed: July 2026 · 6 min read_

If you bought or renovated a rental property this year, you'll meet Form 4562 when you prepare your return. This is the form where depreciation and certain expensing elections get reported — it's not optional if you have depreciable assets placed in service during the tax year.

Okoniq Property Hub tracks your capital improvements and renovation dates so you have the records you need when it's time to fill out Form 4562.

What is Form 4562 and when do landlords file it?

Form 4562 — Depreciation and Amortization — is where you report depreciation for business assets, including rental real estate, appliances, landscaping, and capital improvements. You must file it in the year you place an asset in service, and in any year you claim a Section 179 deduction or bonus depreciation.

After the first year, if you're only claiming regular depreciation on assets placed in service in prior years, you may not need to attach Form 4562 — the depreciation totals flow to Schedule E and you maintain the detail in your own records. But many landlords file it every year to keep a clear trail, especially if they add new property or make significant improvements. The IRS expects you to carry a depreciation schedule forward even if the form itself isn't required every year.

Once you've placed rental property in service, you report the annual depreciation expense on Schedule E regardless of whether Form 4562 is attached. The form is the detailed backup for how you arrived at that number — the placed-in-service date, the recovery method, the convention, and any special elections.

Where do Section 179 elections appear on Form 4562?

Section 179 is an election to immediately expense the cost of qualifying tangible personal property — appliances, furniture, landscaping, certain fixtures — up to a limit set by statute. (Confirm the current annual limit on IRS.gov or with your CPA, as it adjusts for inflation and legislative changes.) The election does not apply to the building structure itself or land improvements that aren't listed property.

Section 179 appears in Part I of Form 4562. You list the qualifying property, its cost, and the amount you elect to deduct. The deduction is limited by your taxable income from the trade or business — you can't create or increase a loss with Section 179. Any unused amount carries forward to future years.

For appliances and capital improvements in a rental, Section 179 can simplify your first-year deductions. Compare it to bonus depreciation and regular depreciation to see which combination gives you the deduction timing you want. If you've made substantial HVAC replacements, Section 179 may let you expense part of the cost immediately rather than spreading it over the recovery period.

How does bonus depreciation work on Form 4562?

Bonus depreciation is an additional first-year deduction for qualifying property. For property acquired after January 19, 2025, the additional first-year depreciation percentage is 100% under current law — made permanent by P.L. 119-21. Taxpayers may elect 40% instead of 100% if they prefer to spread the deduction over multiple years (60% for certain longer-production-period property and certain aircraft). The election and percentage depend on acquisition date, placed-in-service date, and whether the property meets statutory requirements.

Bonus depreciation is reported in Part II of Form 4562, separate from Section 179. Unlike Section 179, there is no taxable-income limit for bonus depreciation — it can increase or create a loss. The property must be new to you (or meet specific used-property rules), have a recovery period of 20 years or less, and be placed in service during the tax year.

If you're depreciating appliances, carpeting, or personal property in a rental, bonus depreciation may be available. Real property — the building structure — does not qualify for bonus depreciation, but personal property and land improvements might. If you performed a cost segregation study, the assets identified as 5-, 7-, or 15-year property could qualify for bonus depreciation in the year placed in service.

Do I need to file Form 4562 every year or only the first year?

You must file Form 4562 in any year you place depreciable property in service, claim a Section 179 deduction, or claim bonus depreciation. After that first year, if you're only reporting regular depreciation on assets from prior years and you're not adding new property, you may not be required to attach Form 4562 — but you still need to maintain a depreciation schedule and report the annual expense on Schedule E.

Many landlords continue to file Form 4562 every year for documentation. If you add an appliance, complete a renovation, or acquire another rental property, you'll file it that year regardless. Keep your depreciation schedule updated annually so you know the current accumulated depreciation and remaining basis for each asset. This becomes critical when you sell — you'll need the depreciation recapture numbers for the gain calculation.

If you're subject to quarterly estimated tax payments, your depreciation expense affects what you owe throughout the year. An updated schedule ensures you're not over-withholding or under-withholding.

How do I keep a depreciation schedule year after year?

A depreciation schedule is a table listing each depreciable asset, its placed-in-service date, cost, recovery period, method, convention, annual depreciation, and accumulated depreciation. Tax software generates one when you enter the asset details, but you should export or print it each year and keep it with your permanent records.

When you sell or dispose of an asset, you'll need the schedule to calculate the gain or loss. If you sell the rental property itself, the accumulated depreciation determines your adjusted cost basis and the amount subject to recapture at ordinary income rates (up to a specified rate for real property depreciation). Without a complete schedule, you're reconstructing history from old returns — possible, but messy.

Update the schedule every year, even if you don't file Form 4562. Add new assets, remove disposed assets, and roll forward the accumulated depreciation for continuing assets. If you're tracking rental expenses for taxes, treat the depreciation schedule as part of that system — it's a deduction you claim every year, just not a cash expense.

If you've inherited property, the schedule starts with the stepped-up basis at the date of death, not the original owner's cost. If you've done a 1031 exchange, the schedule carries forward the deferred gain and adjusted basis from the relinquished property.

FAQ

Do I need Form 4562 if I only own one rental property?

Yes, if you placed that property or any improvement in service during the tax year. You'll also need it in any year you claim Section 179 or bonus depreciation, even on a single asset.

Can I skip Form 4562 if I only have regular depreciation this year?

After the first year, if you're only deducting regular depreciation on assets placed in service in prior years and you're not adding new property, you may not be required to attach Form 4562. The depreciation total still flows to Schedule E, and you must maintain a depreciation schedule in your records.

What recovery period do I use for a rental property on Form 4562?

The recovery period for residential rental property is set by statute. Confirm the current figure on IRS.gov or with a CPA — do not rely on memory or old guidance. The method is typically straight-line with a mid-month convention.

What happens if I lose my depreciation schedule from prior years?

You can reconstruct it from prior-year tax returns, which show the annual depreciation claimed. Work backward to calculate the accumulated depreciation. If returns are missing, contact the IRS for transcripts or consult a CPA to rebuild the schedule.

Can I claim both Section 179 and bonus depreciation on the same asset?

Yes. Section 179 is applied first, then bonus depreciation on the remaining cost basis, then regular depreciation on what's left. The combination can result in a 100% first-year deduction for qualifying property under current rules.

<div class="glass rounded-2xl p-5 mt-7 max-w-4xl border border-red-400/30 bg-red-500/5"> <div class="flex items-start gap-3"> <span class="text-2xl flex-shrink-0">⚠️</span> <div class="flex-1 min-w-0"> <p class="text-red-200 text-sm font-bold">Not tax advice</p> <p class="text-slate-300 text-xs mt-1 leading-relaxed"> This post assumes a straightforward rental property depreciation scenario under current federal tax law. It does not account for your tax bracket, state rules, entity type, passive loss limitations, at-risk rules, or legislative changes after January 2025. Tax rules change and depend on your specific situation. Talk to a licensed CPA before acting on anything here, and confirm current figures on IRS.gov. </p> </div> </div> </div>