RentalCalcs / working records
Deduction timing and study fee
Start with eligibility, then compare the deduction you can actually use with the fee you must pay. This is a record-gathering worksheet, not a tax return calculation.
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Illustration assumptions. US federal illustration for 2026: a residential rental placed in service in September; $320,000 building basis excluding land; $80,000 of eligible shorter-life components qualify for 100% bonus. Assumed marginal federal rate: 32%. The example uses the mid-month convention and 3.5 months of building depreciation.
Example and your records
Item and method
Hypothetical example
Your records
Building basis, excluding landPurchase allocation and capital improvements
Example$320,000
Your records
Eligible shorter-life basisStudy classification and acquisition/service dates
Example$80,000
Your records
First-year months / recovery yearsConfirm the applicable depreciation convention
Example3.5 / 27.5
Your records
Depreciation without study$320,000 ÷ 27.5 × 3.5 ÷ 12
Example$3,393.94
Your records
Depreciation with study$80,000 + ($240,000 ÷ 27.5 × 3.5 ÷ 12)
Example$82,545.45
Your records
Additional first-year deductionDifference using unrounded amounts
Example$79,151.52
Your records
Extra deduction usable this yearIllustration: half usable after tax-return limitations
Example$39,575.76
Your records
Assumed marginal federal ratePreparer estimate; not an automatic rate
Example32%
Your records
Current federal tax reductionUsable extra deduction × assumed rate
Example$12,664.24
Your records
Study fee paidHypothetical quote; get a property-specific proposal
Example$4,500.00
Your records
Reduction less feeExcludes deduction for the fee and later-year effects
Example$8,164.24
Your records
Before using the result
- Check basis, at-risk and passive-activity limitations before treating a deduction as current savings. Owning a long-term rental does not automatically allow losses against wages.
- Compare all/half/none usable: current tax reductions of $25,328/$12,664/$0; after the illustrative fee, $20,828/$8,164/−$4,500. Rounded to dollars.
- This is a current-year comparison. It excludes state tax, fee deductibility, extra preparation costs, lower later deductions, sale tax and time value. A suspended loss may help in a later year.