Cost Segregation Components: Full List of What Reclassifies
Common components evaluated for 5-, 7-, or 15-year MACRS treatment, organized by category — with the classification authority and a confidence rating for each.
Common components evaluated for 5-, 7-, or 15-year MACRS treatment, organized by category — with the classification authority and a confidence rating for each.
The IRS classifies rental property components into four MACRS recovery periods: 5-year personal property (appliances, furniture, carpet and resilient flooring, decorative fixtures), 7-year property (certain fixtures and office equipment), 15-year land improvements (landscaping, paving, fencing), and 27.5-year residential / 39-year commercial structure. A cost segregation study reclassifies what would otherwise sit in the 27.5/39-year bucket, typically 15-25% of a residential property’s depreciable basis, into those faster classes, where it is eligible for 100% bonus depreciation.
This is the complete list of building components classified by IRS depreciation category, pulled from our engineering database. For a deeper look at which MACRS class each component falls into and how the depreciation math works, see our MACRS guide. This page lists 43 components across the 5-, 7-, and 15-year classes, each with its IRS classification authority and a confidence rating.
The full list at a glance:
| Category | Recovery period | Items on this page | Typical share of basis |
|---|---|---|---|
| 5-year personal property | 5 years (IRC §1245) | 21, plus 7 more when furnished | 15–25% |
| 7-year property | 7 years | 3 | The smallest bucket — a handful of items |
| 15-year land improvements | 15 years (Asset Class 00.3) | 12 | Varies with lot size, paving, and pools |
| 27.5 / 39-year structure | 27.5 yr residential / 39 yr commercial | Everything else — the shell | 75–85% on a typical single-family rental |
A cost segregation study takes a building and breaks it into its individual components, then classifies each one by its IRS recovery period under MACRS. Instead of depreciating the entire building over 27.5 years (residential) or 39 years (commercial), you pull out the pieces that qualify for 5-year, 7-year, or 15-year recovery. With 100% bonus depreciation restored permanently under the One Big Beautiful Bill Act (2025+), those reclassified components are deducted in full in Year 1.
The tables below are the components. If you want context on what percentages to expect by property type, see our percentages breakdown. If you want to understand the difference between standard and accelerated depreciation, we have that too. This page is just the list.
How to read the confidence column: Common means it is classified this way in virtually every study—no debate. Typical means the classification holds in most cases, but facts and installation method matter. Judgment call means it depends on context, installation, or auditor interpretation.
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5-Year Personal Property
Five-year property in a cost segregation study is tangible personal property under IRC §1245: components that can be removed without damaging the building, including appliances, carpet and resilient flooring, decorative light fixtures, window treatments, and cabinetry that is genuinely freestanding. On a residential rental these components typically represent 15-25% of depreciable basis. The governing test is removability, not cost or apparent permanence. See our benchmarks data for specifics. Small-multifamily configurations multiply this category by unit count — a triplex carries three kitchen FF&E packages, three bath fixture sets, and three HVAC handlers, pushing 5-year property to roughly 19.1% of basis.
| Component | Description | IRS Basis | Confidence |
|---|---|---|---|
| Carpet & Pad | Wall-to-wall carpeting with padding—removable without damage to building | Reg 1.48-1 | Common |
| Vinyl/Laminate Flooring | Vinyl plank, laminate, resilient flooring—not permanently affixed | Reg 1.48-1 | Common |
| Appliances | Range/oven, refrigerator, dishwasher, microwave, disposal | 00.11 | Common |
| Light Fixtures | Decorative ceiling fixtures, recessed lighting cans, under-cabinet lights | 00.11 | Common |
| Window Treatments | Blinds, shades, curtain rods—removable decorative elements | Reg 1.48-1 | Common |
| Ceiling Fans | Ceiling-mounted fans with light kits | 00.11 | Common |
| Removable Kitchen Fixtures | Freestanding islands, removable range hoods, specialty fixtures | Reg 1.48-1 | Typical |
| Bathroom Accessories | Medicine cabinets, removable vanity tops, accessories | Reg 1.48-1 | Typical |
| Removable Laminate Surfaces | Removable laminate and modular countertop surfaces | Reg 1.48-1 | Typical |
| Door Hardware & Accessories | Locksets, hinges, closers, door stops | Reg 1.48-1 | Common |
| Smoke/CO Detectors | Smoke detectors, carbon monoxide detectors | 00.11 | Common |
| Closet Shelving | Wire or wood closet organizer systems—removable without structural damage | Reg 1.48-1 | Typical |
| Decorative Millwork | Crown molding, chair rail, wainscoting (decorative, not structural) | Reg 1.48-1 | Judgment call |
| Specialty Electrical | Doorbell system, structured wiring for cable/phone/data | 00.12 | Common |
| Bathroom Hardware | Towel bars, toilet paper holders, robe hooks, shower rods | Reg 1.48-1 | Common |
| Kitchen Hood & Ventilation | Range hood, exhaust fan, ventilation equipment | 00.11 | Common |
| Removable Plumbing Trim | Removable faucet trim, showerheads, supply stops | Reg 1.48-1 | Typical |
| Pool Equipment | Pool pump, filter, heater—removable mechanical equipment | 00.11 | Common |
| Garage Door Opener | Automatic garage door opener system | 00.11 | Common |
| Security/Access Control | Card readers, cameras, alarm system—removable electronic | 00.12 | Common |
| Solar Panel System | Rooftop solar photovoltaic system | 48.14 | Common |
STR / Furnished Property Additions
In a furnished rental, an Airbnb, vacation rental, or furnished long-term rental, the furnishings themselves are 5-year personal property under Asset Class 00.11. This is why short-term rentals reach higher accelerated percentages than unfurnished rentals: the furniture, electronics, linens, and kitchen smallwares add a category of 5-year property that an unfurnished property does not have at all. How that plays out in a full study — including the 7-day-rule interaction with W-2 income — is covered on our STR cost segregation page.
cost segregation methodology →
| Component | Description | IRS Basis | Confidence |
|---|---|---|---|
| Bedroom Furniture | Beds, mattresses, dressers, nightstands, headboards | 00.11 | Common |
| Living Room Furniture | Sofas, tables, chairs, entertainment centers | 00.11 | Common |
| Dining Furniture | Dining table, chairs, bar stools | 00.11 | Common |
| TVs & Electronics | Smart TVs, streaming devices, sound bars | 00.11 | Common |
| Linens & Bedding | Sheets, comforters, pillows, towels | 00.11 | Common |
| Kitchen Smallwares | Pots, pans, dishes, utensils, small appliances | 00.11 | Common |
| Outdoor Furniture | Patio furniture, outdoor dining set | 00.11 | Common |
7-Year Property
Seven-year property is the smallest category in a residential cost segregation study, usually three line items or fewer. Most components investors expect to find here are classified as 5-year instead. Under 100% bonus depreciation the Year-1 deduction is identical either way; the recovery period still matters because it affects certain elections and the recapture calculation on sale.
| Component | Description | IRS Basis | Confidence |
|---|---|---|---|
| Decorative Items & Artwork | Wall art, mirrors, decorative accessories, lamps, throw pillows, rugs | 00.11 | Common |
| Exterior Signage | Freestanding monument signs, building-mounted signage | 00.11 | Common |
| Elevator Controls | Control panels, dispatch system, monitoring electronics | 00.12 | Typical |
15-Year Land Improvements
Fifteen-year land improvements are the site components outside the building footprint that are not raw land: driveways and paving, fencing, landscaping, irrigation, exterior lighting, retaining walls, decks, storm drainage, and in-ground pools. They are classified under Asset Class 00.3 and recovered over 15 years, or deducted in full in Year 1 under bonus depreciation. On properties with large lots, extensive hardscaping, or a pool, this is frequently the largest reclassified category by dollar value.
| Component | Description | IRS Basis | Confidence |
|---|---|---|---|
| Concrete Paving & Walks | Driveway, walkways, patio slabs | 00.3 | Common |
| Asphalt Paving | Asphalt driveway and parking areas | 00.3 | Common |
| Fencing | Wood, vinyl, chain-link, or metal fencing | 00.3 | Common |
| Landscaping | Trees, shrubs, ground cover, mulch beds | 00.3 | Common |
| Irrigation System | Sprinkler system, drip irrigation | 00.3 | Common |
| Exterior Lighting | Landscape lighting, pathway lights, security lights | 00.3 | Common |
| Retaining Walls | Decorative and structural retaining walls | 00.3 | Typical |
| Wood Deck/Porch | Exterior wood or composite decking, covered porches | 00.3 | Common |
| Storm Drainage | Site grading, swales, French drains | 00.3 | Common |
| Swimming Pool | In-ground swimming pool | 00.3 | Common |
| Pool Decking | Concrete/stone pool deck | 00.3 | Common |
| Pergola/Gazebo | Freestanding pergola, gazebo, shade structure | 00.3 | Common |
27.5-Year / 39-Year Property (The Structural Shell)
Everything not in the tables above stays on the default schedule: 27.5 years for residential rental property, 39 years for commercial. This is the building itself—foundation, framing, roofing, exterior walls, windows (the glass and frame, not the treatments), main HVAC system, plumbing risers, electrical mains, and drywall. A cost segregation study does not make these go away. It just identifies everything that is not structural and pulls it into a shorter recovery period.
On a typical single-family rental, 75-85% of depreciable basis remains on the 27.5-year schedule. That is the expected result rather than a shortfall: the structural shell is most of a building’s cost. The value of the study is concentrated in the 15-25% that reclassifies, and in deducting that amount in full in Year 1 instead of spreading it across 27.5 years.
The Gray Zone
Not every component falls neatly into a category. Some classifications depend on how the item was installed, what it is attached to, or how aggressive your tax professional wants to be. Here are the three gray areas that come up most often.
Decorative Millwork
Crown molding is technically decorative (5-year) but some auditors argue it is integral to the wall finish (27.5-year). We classify it as 5-year with a judgment-call flag because the weight of case law supports it, but your CPA should know it is debatable. The IRS Cost Segregation Audit Techniques Guide acknowledges decorative finishes as potentially shorter-lived property, but does not draw a bright line. Wainscoting and chair rail fall into the same bucket. If the molding is purely ornamental and could be removed without altering the structural integrity of the wall, the 5-year argument is strong. If it is load-bearing trim integrated into a built-in (rare, but it happens in older homes), it is not.
Built-In vs. Freestanding
The magic word is “removable.” A freestanding kitchen island is 5-year. The same island bolted to the floor with a gas line running to it? That is 27.5-year. A wall-mounted TV bracket is 5-year. A custom media wall with integrated cabinetry, recessed lighting, and drywall returns? That is part of the building. Your contractor’s invoice and installation method determine the classification, not the item itself. This is why we flag “Removable Kitchen Fixtures” as Typical rather than Common—the answer genuinely depends on how it was built.
Kitchen Cabinets
Built-in kitchen cabinetry is structural 27.5/39-year property, not 5-year personal property. Cabinetry screwed to the wall and integrated with the countertop run does not qualify for acceleration. The Tax Court said so directly in AmeriSouth XXXII v. Commissioner (T.C. Memo 2012-67), and we classify it that way even though some providers still put cabinets in the 5-year bucket. A genuinely freestanding unit (a movable island with no plumbing or gas connection, a standalone pantry cabinet) is 5-year personal property. The install method decides it, which is why the removable-fixtures rows above carry a Typical rather than Common confidence rating.
HVAC Components
The system itself (furnace, AC condenser, ductwork) is 27.5-year. Full stop. But the thermostat? The removable grilles? Some firms classify those as 5-year. We do not—the dollar amounts are trivial (a Nest thermostat allocated at $12/unit in a cost study) and it is not worth the audit risk. If an IRS examiner is reviewing your $400K cost seg study and sees you reclassified $36 worth of return air grilles, it does not inspire confidence in the rest of your analysis. We would rather give up $50 in deductions and keep the study bulletproof.
Free preliminary depreciation estimate — property summary, basis allocation, five-year schedule. We do the work; you get the PDF.
See my estimated Year-1 savings →Why This Matters Financially
A single component shows the mechanism in dollars.
Scenario: a $1M single-family rental, 8,000 SF, built in 2005.
Take one component: decorative lighting. Our cost database allocates interior light fixtures at approximately $1.45/SF for a mid-quality residential property of this vintage. On 8,000 SF, that is $11,600 allocated to decorative lighting.
| One Component: Decorative Light Fixtures ($11,600) | Amount |
|---|---|
| Without cost seg (27.5-year straight-line) | $422/year in depreciation |
| With cost seg (5-year, 100% bonus) | $11,600 deducted in Year 1 |
| Year-1 difference at 37% bracket | $4,136 in additional tax savings |
That is $4,136 from one component. A typical cost segregation study reclassifies 15–20 components. The light fixtures are not even the biggest line item—carpeting, appliances, and land improvements each carry more weight. When you stack all of them together, a $1M SFR typically produces $60,000–$80,000 in Year 1 deductions from components that would otherwise trickle out at $2,000–$3,000 per year over 27.5 years.
For a deeper look at the Year 1 math, see our first-year depreciation guide.
How We Classify
Our component classifications are based on IRS Rev. Proc. 87-56 asset class guidelines, the IRS Cost Segregation Audit Techniques Guide (Chapter 7), and industry-standard 2026 national construction cost data. We use a conservative approach: when classification is ambiguous, we note it as a judgment call rather than asserting certainty.
Every study we produce includes component-level detail with IRS asset class citations, cost allocations per square foot, and the specific depreciation schedule for each item. The goal is a report your CPA can file without second-guessing the classifications—and that holds up if the IRS ever reviews it.
See How These Components Apply to Your Property
Frequently asked
What components qualify for 5-year depreciation in a cost segregation study?
Tangible personal property under IRC §1245: carpet and resilient flooring, appliances, decorative light fixtures, window treatments, ceiling fans, door and bathroom hardware, pool equipment, and security systems — plus all furniture, electronics, and kitchen smallwares in a furnished rental. These typically represent 15–25% of depreciable basis.
What counts as 15-year property in cost segregation?
Land improvements under Asset Class 00.3: driveways and paving, fencing, landscaping, irrigation, exterior lighting, retaining walls, decks and porches, storm drainage, in-ground pools, and pool decking — everything outside the building footprint that is not raw land.
What gets reclassified in a cost segregation study?
Everything that is not structural. The study separates a building into components and moves qualifying items from the default 27.5- or 39-year schedule into 5-, 7-, or 15-year MACRS classes. On a typical single-family rental, 15–25% of basis is reclassified; the structural shell stays on the default schedule.
Are kitchen cabinets 5-year property in a cost segregation study?
Generally no. Built-in cabinetry attached to the wall is treated as structural 27.5/39-year property — the Tax Court reached that result in AmeriSouth XXXII v. Commissioner. Genuinely freestanding, removable units can qualify for 5-year treatment, but we classify built-ins conservatively.
How many components does a cost segregation study identify?
A typical residential study identifies and prices 15–20 reclassified components; this page lists 43 across the 5-, 7-, and 15-year classes, including the furnished-rental additions. Larger commercial properties can run well past that.
