Interactive Tool
Cost Segregation Calculator
Enter your property details to estimate how much depreciation a cost segregation study could accelerate into year one — and the tax savings that result.
Your Property Details
Higher land allocation lowers depreciable basis and reduces estimated savings. Typical ranges: MHC 10–20%, multifamily 15–25%, office 20–30%.
Assumed short-life allocation: 25%. Studies typically find 20–30% across unit interiors and site improvements.
Tax & Study
Your Results
Estimate only. Uses typical short-life allocation by asset class — actual results depend on a qualified study, usability of losses, and your tax situation.
Depreciation Comparison — Year 1
Estimated Year-1 Tax Savings
$142,618
At a 37% marginal rate, the accelerated deduction translates to approximately $142,618 of first-year tax savings.
Savings assume the deduction shelters current-year income. On a taxable sale, accelerated depreciation is recaptured (~25% federal on §1250 gain), unless deferred via a 1031 exchange or eliminated via step-up in basis at death.
Study Cost ROI
Illustrative only. Actual results depend on study findings, time-value of money, and individual tax circumstances.
Behind the Numbers
How This Estimate Works
This calculator uses typical short-life allocation percentages by asset class as a proxy for what a real cost segregation study might find. It is an estimate, not a substitute for an engineering-based study.
Why the percentages differ by asset type
Different property types have different mixes of short-life assets. Residential rentals have relatively few non-structural components (appliances, flooring) so studies typically find 15–25% short-life. MHCs are infrastructure-heavy — roads, underground utilities, pads, fencing — so studies routinely find 40–55%. Retail/restaurant has specialized trade fixtures and tenant improvements that push allocations toward 25–35%.
What the numbers represent
The assumed percentages are typical — meaning the middle of the plausible range for a well-performed study on a representative property in each class. Actual results on your property could be meaningfully higher or lower based on construction quality, age, use of tenant improvements, and site work. A qualified cost segregation engineer examines the specific property to produce a defensible allocation.
The bonus depreciation assumption
When the bonus checkbox is on, the full short-life allocation is deducted in year one. When off, the short-life amount is spread across a ~10-year weighted average of 5-, 7-, and 15-year MACRS schedules. The building portion (27.5 or 39 years) depreciates straight-line in either scenario. For assets placed in service before Jan 20, 2025, scale results proportionally: 2023 = 80%, 2024 = 60%, Jan 1–19 2025 = 40%.
What the calculator does not model
Depreciation recapture at sale, the Net Investment Income Tax (3.8%), state tax variations, alternative minimum tax, passive activity loss suspension and carryforward, mid-month placed-in-service conventions (which reduce first-year straight-line slightly), and the time value of money. A CPA working the full return will produce a more precise number — this estimator is for sizing the opportunity.
Next Steps
Understand the Full Strategy
Informational purposes only. Illustrative estimates based on typical short-life allocation percentages by asset class. A qualified cost segregation study is required to determine the actual short-life allocation for any specific property. Does not account for depreciation recapture on sale, passive loss limitations, NIIT, or individual tax circumstances. Consult a CPA before relying on these figures.
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