Austin, TX · $640K
House-hacked, 50% basis allocated to rental side
Year-1 federal benefit
$28,400
Duplex
Duplex cost segregation: $19K–$105K Year-1 deductions.
House-hackers: only the rental side gets cost-segregated. Owner-occupied half stays on personal residence rules.
The 30-second answer
Duplex cost segregation is an engineering-based study that reclassifies a two-unit rental's components out of the default 27.5-year residential schedule into faster 5- and 15-year MACRS classes. A duplex reclassifies in line with a single-family rental — typically 8–21% of building basis: the doubled unit fixtures (two kitchens, two sets of appliances, often two HVAC systems) offset the single shared driveway, landscaping, and site work. With 100% bonus depreciation that amount is deductible in Year 1. If you house-hack (live in one half), only the rental-side basis is eligible, allocated by square footage; the loss is passive under IRC §469 unless you qualify as a real estate professional or materially participate.
Duplex cost segregation reclassifies 8–21% 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 — public government 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. For the general explanation, see what a cost segregation study is and what the report contains.
| Property type | Reclass to 5/7/15-yr | Year-1 federal benefit | Study cost |
|---|---|---|---|
| STR | 19–39% | $45K–$280K | From $495 |
| SFR | 8–32% | $16K–$165K | From $495 |
| Condo | 10–19% | $18K–$76K | From $495 |
| Brownstone | 5–20% | $60K–$640K | From $495 |
| Rowhouse | 5–18% | $10K–$170K | From $495 |
| Duplex this page | 8–21% | $19K–$105K | From $995 |
| Fourplex | 14–29% | $56K–$230K | From $995 |
| Office | 16–29% | $84K–$650K | From $995 |
| Retail | 20–37% | $90K–$690K | From $995 |
| Industrial | 15–28% | $78K–$840K | From $2,495 |
| Self-storage | 10–36% | $75K–$1.6M | From $2,495 |
| Medical office | 16–29% | $84K–$540K | From $2,995 |
| Mixed-use | 12–23% | $63K–$515K | From $995 |
| Multifamily | 14–28% | $44K–$200K | From $995 |
| Multifamily 5+ | 14–26% | $110K–$1.0M | From $1,995 |
| Triplex | 8–26% | $25K–$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 $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 |
| Funeral homes | 18–30% | $135K–$900K | By proposal |
| Child day care | 15–28% | $56K–$630K | From $2,995 |
| Adult day care | 14–26% | $78K–$780K | From $2,995 |
| Church | 10–22% | $37K–$825K | From $2,995 |
| Farm | 8–65%† | $19K–$780K | From $995 |
Reclassification ranges from the bands we publish per property type (measured on our delivered studies where we have enough of a type, modeled elsewhere); 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+. The ADU figure is an ADU acquired with a house; one the owner built or converted is priced on its documented construction cost, from $995. See full provider comparison.
† Farm: the figure is property with a recovery period of 20 years or less, on a farm with one or more rental houses on it. It counts 10- and 20-year property, which no other row has, and its dollar figure is a first-year deduction, not tax saved. A farm is quoted from a list of what is on it; see how.
Worked examples · modeled
What duplex cost seg looks like in practice.
Illustrative, modeled properties, not client engagements. 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…
- ✓Pure-rental duplexes (both units rented out)
- ✓Owner-occupied house-hackers, but only the rental-side basis is eligible
- ✓Duplexes with separate mechanicals per unit (more 5/15-yr property)
Skip it when…
- ×Owner-occupied duplexes where you live in both halves
- ×Duplexes under $250K basis where the math gets thin
Estimate
Run the numbers on your duplex.
Pre-set to Duplex defaults — adjust price + bracket to match your property.
Estimated Year-1 tax savings · Click to order →
$26,156
on $70,691 of accelerated deductions (Year 1, beyond straight-line)
typical $20,343–$40,687
Want this in writing for your CPA? Get a 1-page analysis →5-yr15-yr27.5/39-yr
Study cost
$1,295
ROI on study
20×
Delivery
1–2 business days
Your study includes more than the report.
- Engineering-based, property-specific analysis
- Direct coordination with your CPA
- Free revisions for 12 months; corrections of our errors always free
- Renovation analysis under $100,000 included
- Lifetime written audit support
- CPA-ready depreciation schedules and Excel fixed-asset file
Everything included in your study fee. Form 3115 preparation available separately.
Estimate based on public government construction cost data and IRC §168(k). Your actual result varies with property age, condition, and basis allocation.
Frequently asked
Duplex cost segregation, by question.
Do duplexes qualify for cost segregation?
Yes — typically 8–21% of basis, in line with a single-family rental: the doubled unit fixtures (two kitchens, two appliance sets, often two HVAC systems) offset the single shared driveway and site work. The whole reclassified amount is deductible in Year 1 under 100% bonus depreciation.
I live in half my duplex — can I still do this?
Yes, but only the rental-side basis is eligible. The study allocates basis by square footage between your owner-occupied half (personal residence, not depreciable) and the rented half, and cost-segregates only the rental portion. The owner-occupied half stays on personal-residence rules.
How much does a duplex cost segregation study cost?
Duplexes are priced on the multifamily 2–4 tier: from $995 for a sub-$300K property, $1,295 for $300K–$700K, and $1,495 up to $1M, delivered as a CPA-ready PDF, within 1–2 business days.
Regulation references
The rules that govern duplex cost segregation.
- Cost Segregation on a Duplex: About the Same Share as a Single-Family Rental — our in-depth guide to duplex 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).
Want your own numbers instead?
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