Brooklyn — single-family rental · $2.4M (land 19.7%)
3,000 SF, 1899. Nothing declared: 6.8% of the $1.93M depreciable basis. Declaring a luxury finish level and the yard amenities takes it to $124,275 (9.2%).
Year-1 federal benefit
$81,581
Brownstone
Brownstone cost segregation: $60K–$640K Year-1 deductions.
For Brooklyn and DC brownstones. The facade, cornice and stoop are building components, the rear garden and areaway are the only real site work, an owner-occupied brownstone depreciates only the rental share, and the result turns on what you can document rather than on the purchase price.
The 30-second answer
Brownstone cost segregation is an engineering-based study that reclassifies a masonry rowhouse's components out of the default 27.5-year residential schedule into faster 5- and 15-year MACRS classes. A rowhouse is shaped differently from a detached house and the study reflects it: there is no driveway, so the 15-year land improvements are limited to the areaway ironwork, the rear garden paving and any garden walls, while the load-bearing brick shell, the brownstone or limestone facade, the cornice, the stoop and the original interior fabric (ornamental plaster, marble mantels, pocket doors) are §1250 building components that stay on the 27.5-year schedule. The reclassified basis is therefore concentrated in removable interior finishes and appliances. Many brownstones are owner-occupied with one or two floors rented, and only the rental share of the basis is depreciable — the study allocates it by square footage and states the share separately.
Brownstone cost segregation reclassifies 5–20% of depreciable basis from the 27.5- or 39-year shell into 5-, 7-, and 15-year MACRS classes per 26 U.S.C. § 168 and Rev. Proc. 87-56. Under OBBBA's permanent 100% bonus depreciation (placed-in-service 2025+), reclassified components are deductible in year one. All credible cost-seg providers use the same federal framework — industry-standard 2026 construction cost data, MACRS classification, IRS Audit Techniques Guide (Pub 5653) compliance. What differs across property types is land-allocation share, FF&E weight, and material-participation eligibility under §469.
| Property type | Reclass to 5/7/15-yr | Year-1 federal benefit | Study cost |
|---|---|---|---|
| STR | 22–33% | $52K–$235K | From $495 |
| SFR | 8–32% | $16K–$165K | From $495 |
| Condo | 10–17% | $16K–$61K | From $495 |
| Brownstone this page | 5–20% | $60K–$640K | From $495 |
| Rowhouse | 5–18% | $10K–$170K | From $495 |
| Duplex | 13–20% | $31K–$100K | From $995 |
| Fourplex | 16–29% | $64K–$230K | From $995 |
| Office | 16–29% | $84K–$650K | From $1,995 |
| Retail | 20–37% | $90K–$690K | From $1,995 |
| Industrial | 15–28% | $78K–$840K | From $2,495 |
| Self-storage | 19–36% | $140K–$1.6M | From $2,495 |
| Medical office | 16–29% | $84K–$540K | From $2,995 |
| Mixed-use | 12–23% | $63K–$515K | From $1,995 |
| Multifamily | 15–28% | $48K–$200K | From $995 |
| Multifamily 5+ | 14–26% | $110K–$1.0M | From $1,995 |
| Triplex | 14–26% | $44K–$165K | From $995 |
| Restaurant | 16–29% | $72K–$430K | From $2,995 |
| Vet | 19–36% | $85K–$540K | From $2,995 |
| Gym | 21–40% | $110K–$900K | From $2,995 |
| Dealership | 25–47% | $465K–$4.2M | From $2,995 |
| ADU | 7–14% | $8K–$39K | From $495 |
| Commercial | 18–34% | $94K–$765K | From $1,995 |
| Data center | 43–65% | $2.5M–$29M | $4,995–$54,995 (sub-$100M); $100M+ by proposal |
| Senior living | 21–39% | $315K–$2.3M | By proposal |
Reclassification ranges from internal benchmarks across 4,000+ studies; Year-1 federal benefit assumes 37% bracket and full first-year usability. Study costs are Cost Seg Smart pricing — comparable engineering studies elsewhere range $5,000–$15,000+. See full provider comparison.
Real examples
What brownstone cost seg looks like in practice.
Estimates assume 37% federal bracket and full first-year usability of the loss (active income offset or REPS). Your actual benefit varies with bracket, basis allocation, and CPA's treatment.
Good fit when…
- ✓Brooklyn and DC brownstones and greystones on their own lot, one unit or two to four
- ✓Owner-occupied buildings with a rented garden floor or upper unit (the study allocates the rental share)
- ✓Restored interiors where the finish level, appliances and lighting carry the reclassification
Skip it when…
- ×A rowhouse you occupy entirely — a personal residence has no depreciable basis to segregate
- ×A gut renovation still in progress; the improvement belongs in its own study with its own placed-in-service date
Estimate
Run the numbers on your brownstone.
Pre-set to Brownstone defaults — adjust price + bracket to match your property.
Estimated Year-1 tax savings · Click to order →
$23,680
on $64,000 of accelerated deductions
Want this in writing for your CPA? Get a 1-page analysis →5-yr15-yr27.5/39-yr
Study cost
$895
ROI on study
26×
Delivery
< 1 hour
Estimate based on industry-standard 2026 construction cost data and IRC §168(k). Your actual result varies with property age, condition, and basis allocation.
Frequently asked
Brownstone cost segregation, by question.
Do brownstones qualify for cost segregation?
Yes, and the composition is distinctive. Because the lot is narrow and there is no driveway, the 15-year land improvements are limited to the areaway ironwork, the rear garden paving and any garden walls. The load-bearing masonry shell carries a larger share of the replacement cost than a frame house of the same size, so the reclassified basis concentrates in the removable interior finishes, lighting and appliances rather than in site work.
I live in part of the building and rent the rest. What is depreciable?
Only the rental share. The study allocates the depreciable basis by square footage — a garden floor of 1,200 square feet in a 3,600 square foot building is 33.3% — and states that share separately on the report. Your own unit is personal-use property and gets no depreciation, so the figures relate to the rented portion rather than the whole purchase price.
Are the facade, cornice, stoop and marble mantels reclassified?
No, and the study says so in as many words. The brownstone or limestone facade, the cornice, the stoop, the ornamental plaster, the marble mantels and the pocket doors are §1250 building components recovered over 27.5 years with the building. They are identified in the schedule under the building class so a reviewer can see they were classified rather than missed. What reclassifies is the removable content: appliances, floor coverings, window treatments, decorative lighting and the like.
What does a brownstone study cost?
A one-unit brownstone is priced as a one-unit residential study, from $495 depending on purchase price. A brownstone divided into two to four units is priced in the 2–4 unit family, even when you occupy one of the units — the study still has to model every unit in the building.
I paid several million. Does that mean a large reclassification?
Not by itself. In Brooklyn a large share of the price is land and location, and the study measures what is in the building, not what the market charged for the address. Modeled with nothing declared, the scenarios above land between 5% and 7% of depreciable basis whether the price is $2.4M or $3.9M. What moves the figure is documentation: the finish level, the appliances, the improvements you can evidence, and — on an owner-occupied building — how much of the square footage is actually rented.
Is this page for any attached rowhouse?
No. It covers the masonry brownstone and greystone rowhouse as built in Brooklyn and Washington, DC, where the shell is load-bearing brick with a stone facade and the lot is a narrow areaway and rear garden. A Baltimore or Philadelphia brick rowhouse is a different construction model at a different cost level, and it has its own page and its own price band.
My rear extension or deck was never filed with the city. Does that matter?
It matters for how the study describes it, not for whether it exists. An extension or a ground-level patio that physically exists and was in use when you bought is included; legalizing an unpermitted structure is a filing process rather than construction. If the filing turns into actual construction work, that work is a separate improvement with its own placed-in-service date and belongs in a later study. If a seller escrowed money toward the work, any amount you are reimbursed is not your cost, and your CPA should decide how to treat it.
Regulation references
The rules that govern brownstone cost segregation.
- Real estate professional status (REPS) — the 750-hour and 51% tests under 26 U.S.C. § 469(c)(7), and the seven material participation tests under Treas. Reg. § 1.469-5T. Required to offset W-2 income with long-term rental losses unless the property qualifies under the STR loophole.
- Form 3115 (catch-up depreciation) — how to apply cost segregation to a property placed in service in a prior year. Full § 481(a) catch-up adjustment, automatic change-number 7, no IRS user fee.
- Treas. Reg. § 1.469-1T — full reference — all six (A)–(F) exceptions that reclassify a rental as non-rental for passive activity loss purposes.
- Regulations hub — full canonical reference for all cost segregation regulations.
- irsdepreciationrules.com — companion plain-language reference for the underlying IRS depreciation statutes (operated by Cost Seg Smart).
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