Initial Building Value will be added with Rehab Costs to determine an improved building value for accumulated depreciation purposes. This calculator assumes that you use a 27.5 year straight line method of depreciation. (Building Value + Rehab Costs)/27.5. Purchase price is not used to calculate accumulated depreciation, since purchase price includes land value which is not a depreciable asset. Since this calculator is used for "already aquired" property, you need to input your accumulated depreciation from prior years. Once total accumulated depreciation reaches "Intial Building Value" plus "Rehab Costs", accumulated depreciation will go flat line.