Cost Segregation on a Triplex: About the Same Share as a Duplex, More Dollars

A triplex typically reclassifies 8–26% of its depreciable basis in a cost segregation study, most often around 17%. On a $600,000 triplex that means roughly $81,600 of building cost moves out of the 27.5-year schedule and into property you can deduct in Year 1 under the restored 100% bonus depreciation.

The interesting part of a triplex is not the percentage, which is close to a duplex’s. It is what the third unit does and does not add: a third kitchen and appliance set add 5-year property, while a third furnace, water heater and electrical service add cost that mostly stays in the building. This guide walks through a $600K triplex unit by unit, then covers the owner-occupied case and where a three-unit building sits between its two- and four-unit neighbours. If you want the product page rather than the explanation, it is here.

A $600K triplex, worked through

Take a three-unit building bought for $600,000, with 20% of the price allocated to land. An illustrative split at the representative rate looks like this (your own mix depends on the finishes and the lot):

	Share of basis	Amount	Per unit
Purchase price		$600,000
Land (not depreciable)		$120,000
Building basis	100%	$480,000	$160,000
5-year personal property	8.8%	$42,432	$14,144
7-year property	0.5%	$2,448	$816
15-year land improvements	7.6%	$36,720	shared
Total reclassified	17.0%	$81,600
Remaining 27.5-year building	83.0%	$398,400

The 5-year line is the one that scales with unit count: about $14,100 per unit of cabinetry, appliances, flooring, lighting and similar finish items. The 15-year line does not divide by unit. Paving, walks, fencing, site lighting and landscaping belong to the lot, and a three-unit lot typically carries more parking and hardscape than a duplex lot.

What that does to Year 1. Without a study, the whole $480,000 goes on the 27.5-year schedule, about $17,500 a year (a little less in the purchase year because of the mid-month convention). With the study, the $81,600 is deductible in Year 1 under bonus depreciation, and the remaining $398,400 still depreciates at about $14,487 a year. A full first year comes to roughly $96,087 of depreciation instead of $17,500.

Federal bracket	Tax value of the $81,600
37%	$30,192
32%	$26,112
24%	$19,584

A study for a $600K triplex is $1,295 on our multifamily 2–4 tier, so at the 37% bracket the Year-1 federal value is about 23 times the fee. Whether you can use the deduction this year, rather than carrying it forward, depends on the passive-activity rules covered further down.

Three of everything: what the third unit adds, and what it doesn’t

A triplex has three complete dwellings under one roof, so most of what a study looks at comes in threes. They do not all land in the same place.

Items that multiply the reclassified amount (generally 5-year personal property):

• Three kitchens’ worth of cabinetry, countertops and hardware
• Three appliance sets: range, refrigerator, dishwasher, microwave, and in-unit washers and dryers where the owner supplies them
• Flooring in each unit: carpet, vinyl plank and other finish flooring that is not part of the structure
• Decorative and task lighting, ceiling fans, and window coverings the owner provides
• Bathroom accessories and specialty fixtures beyond the rough plumbing

Items that multiply the cost but mostly stay in the building (27.5-year):

• Three furnaces or heat pumps and their ductwork. In a residential rental, heating and cooling equipment serving the building is generally a structural component.
• Three water heaters and the plumbing that feeds them
• Three electrical services, meters and panels
• The fire-rated walls and floor-ceiling assemblies that separate the units, which building codes generally require between dwellings

This split is why a triplex does not reclassify 50% more than a duplex just because it has 50% more units. The things that are expensive to triplicate, the mechanical systems and the separations between households, are mostly structural. The things that land in the 5-year class are the finish items each household lives with.

Items that belong to the property, not to a unit (generally 15-year): the driveway and parking area, walks, exterior stairs and landings that are not part of the building structure, fencing, trash enclosures, site lighting, and landscaping. On a triplex this line is often larger than on a duplex because local codes and tenants usually expect more off-street parking.

Shared spaces inside the building. Some triplexes have a common entry, stairwell or basement laundry. Owner-supplied coin or card-operated laundry equipment is generally 5-year property; the stairwell, entry and their finishes generally stay with the building.

A study documents each of these at the component level, with the cost source and recovery class for each line. A flat “19% reclass” assumption applied without that detail is the kind of estimate the IRS Audit Techniques Guide tells examiners to scrutinise; our audit support page explains how a study is documented.

If you live in one of the units

A triplex is a common first property for owner-occupants: live in one unit, rent the other two. Cost segregation still works, but only on the rented portion.

The building basis is split between personal and rental use, usually by square footage. With three equal units and you in one, two-thirds is depreciable. On the $600K example that is $320,000 of rental basis, and at the representative 17% about $54,400 is accelerated rather than $81,600. Your own unit’s kitchen and appliances are personal-use property and are not depreciated at all.

Two more things change for an owner-occupant:

• The deduction may not be usable yet. Rental losses are generally passive. An owner with a salary and no other passive income usually carries them forward, unless income is under the thresholds for the $25,000 active-participation allowance or they qualify as a real estate professional.
• Moving out changes the basis. When you convert your own unit to a rental later, that unit’s depreciable basis is generally the lower of its adjusted basis and its fair market value on the conversion date, and a study can be updated to cover it.

Our house-hacking guide covers the allocation and the passive-loss rules in more detail.

Where a triplex sits between a duplex and a fourplex

The unit counts that matter for a triplex are not the ones people expect.

Depreciation life: no line at three units. A triplex is 27.5-year residential rental property for the same reason a duplex is: at least 80% of its gross rents come from dwelling units (IRC §168(e)(2)(A); IRS Pub. 946). A triplex only moves toward 39-year treatment if something like a ground-floor shop produces more than 20% of the rent, which makes it a mixed-use property. If a previous preparer depreciated your triplex over 39 years, a Form 3115 can correct that as well.

Financing: the line is at five units. One to four units is still a residential mortgage, which is why so many investors buy a triplex or fourplex rather than a five-unit building. Owner-occupant programs for three- and four-unit properties also tend to add underwriting tests that duplexes do not face, such as the FHA self-sufficiency test on projected rents. None of that changes the depreciation, but it shapes who buys triplexes: often an owner-occupant or a first-time investor, which makes the owner-occupied and passive-loss sections above unusually relevant.

Reclassification: overlapping ranges from two to four units. From the bands we publish per property type:

Building	Most often around	Typical range
Two units	15%	8–21%
Three units	17%	8–26%
Four units	19%	14–29%

The ranges overlap heavily, so treat two-, three- and four-unit buildings as reclassifying at roughly similar rates; your own building can land anywhere in its range. For reference, single-family rentals typically run 8–32% (most often around 15%), and buildings of five or more units 14–26% (most often around 17%). Bigger buildings carry more shared structure, such as corridors, elevators and central systems, relative to the finish items inside each unit.

Study fee: one tier for two to four units. Duplexes, triplexes and fourplexes share the multifamily 2–4 pricing tier, so at the same purchase price the fee is the same regardless of unit count. What differs is the purchase price a three-unit building typically commands:

Illustrative purchase	Most often around	Year-1 federal value at 37%	Study fee
Duplex, $400K	15%	$17,760	$1,295
Triplex, $600K	17%	$30,192	$1,295
Fourplex, $800K	19%	$44,992	$1,495

All three rows assume 20% land, 100% bonus depreciation and the representative rate for each type. For a triplex at a different price, the $500K triplex worked example runs the same arithmetic, and the calculator takes your own figures.

When a triplex study is worth ordering

Usually worth it:

• A triplex bought or placed in service in 2025 or later, where 100% bonus depreciation applies
• An owner who can use the loss this year: a real estate professional, an investor with other passive income, or someone under the active-participation income limits
• A building with owner-supplied appliances, updated kitchens or recent unit renovations, which all add to the 5-year line
• A triplex bought in earlier years and never studied, through a Form 3115 catch-up

Worth running the numbers first:

• A lower-priced triplex, where the fee is a larger share of the benefit. The calculator shows both.
• An owner-occupant with two rented units and no way to use a passive loss this year. The study still sizes the deduction, but it may sit as a carryforward.
• A planned sale within a couple of years. Depreciation taken is recaptured at sale unless the property is exchanged, so the benefit is mostly timing.

What to have ready for a triplex study

A few documents make a three-unit study faster and the schedule tighter:

• The closing statement (or builder’s cost breakdown, if you built it), which sets the basis and the date the property was placed in service.
• Square footage by unit, if you live in one of them, so the personal-use share is measured rather than assumed.
• Which appliances you own in each unit. Tenant-owned washers or window units are not your basis; owner-supplied ones are 5-year property.
• Receipts for unit turns and renovations since purchase, broken out by unit where you can. A new kitchen in one unit is its own set of 5-year components.
• Any commercial rent. If part of the building is leased to a business, its share of gross rent decides whether the 27.5-year treatment holds.
• Photos of each unit’s kitchen and bath and of the lot, which let the study place components without a site visit.

What the study includes

A Cost Seg Smart triplex study is a CPA-ready PDF with a component-level schedule for every unit and the site, the MACRS class for each line, the land allocation and its source, year-by-year depreciation tables for Form 4562, and a methodology section keyed to the IRS Audit Techniques Guide. Every report is quality-checked before delivery, and the §481(a) catch-up schedule your CPA needs is included when the triplex was placed in service in an earlier year. You can read a full sample triplex report before ordering, and see what is covered if a study is examined on the audit support page.

Related guides:

• Triplex cost segregation: pricing and ordering for three-unit buildings
• $500K triplex worked example
• Duplex cost segregation: the two-unit version of this guide
• Multifamily cost segregation guide: two units through large apartment complexes
• House hacking and cost segregation: living in one unit
• Reclassification bands by property type: the bands we publish, from delivered studies where measured and modeled elsewhere

Frequently asked

How much does cost segregation reclassify on a triplex?

A triplex typically reclassifies 8–26% of depreciable basis, most often around 17%. On a $600K triplex with 20% allocated to land, that is roughly $81,600 of a $480,000 building basis moved into 5-, 7- and 15-year property, which is eligible for 100% bonus depreciation when the property was acquired and placed in service after January 19, 2025.

Does a triplex count as commercial property because it has three units?

No. Depreciation life is not set by unit count. Under IRC §168(e)(2)(A), a building is residential rental property, depreciated over 27.5 years, when at least 80% of its gross rents come from dwelling units. A triplex rented to three households passes easily. The unit-count lines that do matter for a triplex are about financing, where one to four units is still a residential mortgage and five or more is a commercial loan.

Do the three furnaces and three water heaters in a triplex count as 5-year property?

Usually not. In a residential rental, heating, cooling and water-heating equipment that serves the building is generally treated as part of the building's structural systems and stays on the 27.5-year schedule. Three of them raise the cost of the building, and therefore its basis, but not the share a study can reclassify. The 5-year property in a triplex comes mainly from the three kitchens, appliance sets, flooring, and finish items in each unit.

I live in one unit of my triplex. Can I still do cost segregation?

Yes, on the rented portion. Basis is split between personal use and rental use, usually by square footage. If the three units are equal and you live in one, about two-thirds of the building is depreciable, and the study's reclassified amount is scaled to that share. On a $600K triplex at a typical 17% that works out to roughly $54,400 of accelerated depreciation instead of $81,600.

Can I do cost segregation on a triplex I bought years ago?

Yes. A Form 3115 change in accounting method lets you claim the depreciation you missed as one §481(a) adjustment on your current return, without amending prior years. Whether the missed amount is eligible for bonus depreciation depends on when the triplex was placed in service; your CPA confirms the numbers.

Does a triplex reclassify more than a duplex?

Not by much, and not reliably. The ranges we publish overlap: a duplex typically reclassifies 8–21% of depreciable basis (most often around 15%), a triplex 8–26% (most often around 17%), and a fourplex 14–29% (most often around 19%). Treat duplexes, triplexes and fourplexes as reclassifying at roughly similar rates. What changes with the third unit is the dollar amount, because a larger building has a larger basis.