Cost Segregation Calculator

A cost segregation study is an engineering-based analysis that reclassifies components of your property into shorter IRS depreciation categories (5, 7, and 15 years) instead of the default 27.5 or 39 years. This accelerates your depreciation deductions, reducing your tax bill in the early years of ownership. The IRS considers cost segregation a legitimate tax strategy — it's referenced in their Cost Segregation Audit Techniques Guide.

The calculator uses the same reclassification percentages we see across actual studies, so it's directionally accurate for typical properties. However, it uses a flat 80% depreciable basis and can't account for property-specific factors like renovations, age, condition, or local construction costs. Our actual studies use property-specific data from assessor records, satellite imagery, and construction cost databases — results typically come in at or above the calculator estimate.

Yes. The One Big Beautiful Bill Act (signed July 2025) permanently restored 100% bonus depreciation for property placed in service in 2025 and beyond. All property reclassified through cost segregation into 5-year, 7-year, or 15-year MACRS classes is eligible for full first-year deduction under IRC §168(k). See our MACRS depreciation guide for a full breakdown of recovery periods.

Cost segregation typically delivers positive ROI on properties valued at $200K and above for investors in the 24%+ tax bracket. Our studies start at $495 for residential properties. Even a $200K rental generates roughly $10K in accelerated first-year deductions. See our analysis of cost segregation under $500K and full pricing.

Our studies are delivered in under 1 hour for most properties. No site visit or tenant disruption required — we use county assessor records, satellite imagery, and construction cost databases to complete the analysis remotely. Traditional engineering firms typically take 4–8 weeks. Read the full comparison.

Cost segregation may not make sense if: you plan to sell the property within 1–2 years (recapture may outweigh the benefit), the property value is under $150K (the study cost relative to savings is marginal), you're in a low tax bracket (below 22%), or the property is owner-occupied rather than income-producing. We'd rather tell you upfront than sell you a study that doesn't pencil out. See our full breakdown of the disadvantages of cost segregation.

Yes. If you've owned the property for more than a year, you can file a Form 3115 (Change in Accounting Method) to claim all the accelerated depreciation you missed — going back to the original placed-in-service date. This is called a "lookback" study, and it allows you to take the cumulative catch-up deduction in a single tax year without amending prior returns. Read our Form 3115 filing guide for details.

When you sell the property, the IRS recaptures accelerated depreciation at a maximum 25% rate (Section 1250). But the time value of taking the deduction now almost always outweighs the future recapture cost — and a 1031 exchange can defer recapture indefinitely. Your CPA can model the full lifecycle economics for your specific situation.