Free Cost Segregation Calculator (Excel Spreadsheet)

What's in the Spreadsheet

Five tabs, each built around a specific question an investor or CPA would ask:

Example Output

Two properties at different price points showing what the spreadsheet calculates:

These are illustrative examples. Actual results depend on property-specific factors including age, condition, renovations, and local construction costs. Consult your CPA before making tax decisions.

When the Spreadsheet Isn't Enough

This spreadsheet uses category-level averages for each property type. It estimates reclassification at 17–30% of depreciable basis depending on property type, with a flat 80% land allocation. That's a useful approximation — good enough to decide whether cost segregation is worth pursuing for your property.

But it can't do what a full study does.

A full cost segregation study analyzes 200+ individual building components using property-specific data: county assessor records, satellite imagery, construction cost databases adjusted by the BLS Producer Price Index, and geographic cost multipliers for your metro area. The result is a 40+ page engineering report with component-level MACRS classification, depreciation schedules, and IRS audit defense documentation.

IRS audit risk guide →

our engineering methodology →

If your spreadsheet estimate looks promising, the actual study typically identifies more reclassifiable components — because it analyzes individual building systems rather than category averages.

What Gets Reclassified in a Study

The spreadsheet groups components into three MACRS classes. Here's what each class actually contains in a typical residential or STR property:

5-Year Personal Property

Appliances (refrigerator, dishwasher, washer/dryer, range), flooring (carpet, tile, hardwood), cabinetry, countertops, light fixtures, window treatments, built-in shelving, bathroom fixtures, furniture (if furnished STR), electronics, fire suppression equipment. These are the components with the shortest recovery period and the biggest Year 1 impact.

15-Year Land Improvements

Landscaping, driveways, sidewalks, patios, retaining walls, fencing, exterior lighting, parking areas, drainage systems, septic systems. These are permanently attached to the land but have shorter useful lives than the building structure.

27.5-Year (or 39-Year) Building Structure

Foundation, framing, roofing, exterior walls, insulation, HVAC ductwork, plumbing rough-in, electrical rough-in. These are the structural elements that remain on the default depreciation schedule. Cost segregation doesn't change these — it identifies everything else that shouldn't be lumped in with them.

For a breakdown of typical reclassification percentages by property type, see our data page.

Why Excel Calculators Have Limits

This spreadsheet is a useful planning tool. But it's important to understand what it can't do — and why a real study gives you a fundamentally different result.

• No property-specific data. The spreadsheet uses national-average reclassification percentages by property type. It doesn't know whether your property has a hot tub, a finished basement, extensive landscaping, or a recently renovated kitchen. A real study uses assessor records, satellite imagery, and construction cost databases to model your specific property.
• No geographic adjustment. Construction costs vary 30–50% between metros. A $500K property in San Francisco has very different component costs than a $500K property in Memphis. The spreadsheet doesn't account for this. Our studies use geographic cost multipliers for 300+ metro areas.
• Not audit-defensible. An Excel estimate is not documentation. If the IRS questions your depreciation, you need a professional study with component-level MACRS citations, a methodology narrative, and reconciliation to basis. The spreadsheet can't substitute for that.
• Typically underestimates. Because the spreadsheet uses category averages, it misses property-specific components that a full study would identify. The actual study almost always finds more reclassifiable value.

Use the spreadsheet to decide whether cost segregation is worth pursuing. Then run the online calculator for a more detailed estimate, or order a full study for the real numbers your CPA can file.

Frequently Asked Questions