Cost Segregation Calculator
Estimate the first-year depreciation and tax savings a cost segregation study could accelerate, and whether the study pays for itself.
First-year deduction
$110,909
vs $14,545 without a study
First-year tax savings
$30,836
with 100% bonus depreciation
How the basis is reclassified
| Land (not depreciable) | $100,000 |
| 5-year property (fixtures, finishes) | $60,000 |
| 15-year property (land improvements) | $40,000 |
| Structure (27.5-year) | $300,000 |
| Building basis | $400,000 |
Short-life property (the accent rows) is bonus-depreciation eligible, which is what pulls $96,364 of deductions into year one instead of spreading them over decades.
Informational and educational only, not tax advice, and no accountant-client relationship is created. Estimates use simplified assumptions and do not reflect your specific situation. Verify current tax law and consult your CPA before filing.
Frequently asked questions
What is cost segregation?
Cost segregation is a study that reclassifies parts of a building into shorter depreciation lives. Instead of depreciating the whole structure over 27.5 or 39 years, fixtures and finishes move to a 5-year life and land improvements to a 15-year life, so you deduct far more in the early years.
How much can cost segregation save?
It depends on the property, but a study commonly reclassifies 20 to 40 percent of the building basis into short-life property. With 100 percent bonus depreciation, all of that can be deducted in year one, which for a typical rental can mean tens of thousands of dollars of accelerated deductions. Enter your numbers above for an estimate.
Does 100% bonus depreciation still apply?
Yes. The 2025 tax law permanently restored 100 percent bonus depreciation for property placed in service on or after early 2025, after it had been phasing down. That makes a cost segregation study more valuable than it was in 2023 and 2024, when bonus was 80 and 60 percent.
Is a cost segregation study worth it?
A study usually makes sense on properties with a depreciable basis above roughly 150,000 to 300,000 dollars, where the first-year tax savings exceed the study cost several times over. The payback figure above compares your estimated savings to the study cost. Larger and commercial properties benefit most.
What is depreciation recapture?
Depreciation you take reduces your basis, so more of your gain is taxed when you sell, up to 25 percent on the recaptured amount. Cost segregation accelerates deductions rather than creating new ones, so plan for recapture, or defer it with a 1031 exchange.
Is this calculator tax advice?
No. It is an educational estimate that models a typical study outcome with simplified assumptions. A real study is an engineered analysis. Confirm any numbers with a CPA and a qualified cost segregation provider before relying on them.