How much can a $1M office actually save in Year 1?

On a $1M purchase price with a 25% land allocation, the depreciable basis is $750,000. An engineering-based cost segregation study reclassifies about $142,500 (19% of basis) into 5-, 7-, and 15-year property — yielding roughly $52,725 in Year-1 federal tax savings at the 37% marginal bracket. Standard 27.5/39-year depreciation produces only $19,231 in the same year.

What does a study cost for this property type and is it worth it?

A Cost Seg Smart study at this purchase price is $1,495. With ~$52,725 in projected Year-1 tax savings, the return on the study cost is roughly 35× — assuming the investor has the income to absorb the deductions. The study is delivered as a 40+ page IRS-defensible PDF in under one hour.

Worked example · Office

Cost segregation on a $1M Office reclassifies $142,500 into accelerated depreciation.

Engineering-based study using RSMeans 2026 cost data and IRS Audit Techniques Guide methodology. Numbers below are computed from the same formula our production studies use — adjust for your actual property with the calculator at the bottom.

Accelerated depreciation

$142,500

19% of $750,000 basis

Year-1 federal tax savings

$52,725

at 37% marginal bracket

Return on study cost

35×

study fee $1,495

MACRS class breakdown

How the $142,500 splits across 5-, 7-, and 15-year property.

These percentages are illustrative for a office of this size and age. Your study reports component-level detail so your CPA can place each item on the correct depreciation schedule.

45%

15%

40%

5-year property

$64,125

Personal property: appliances, carpet, FF&E, decorative finishes. Fully bonus-eligible at 100% under OBBBA (2025+).

7-year property

$21,375

Office furniture, certain equipment, specialty fixtures. Also bonus-eligible.

15-year property

$57,000

Land improvements: driveways, fencing, landscaping, site lighting. Bonus-eligible.

Year-1 deduction comparison

Without a study vs. with one.

Standard depreciation

750,000 ÷ 39 years

$19,231

Year-1 deduction (no study)

With cost seg + 100% bonus

5/7/15-yr accelerated

$142,500

Year-1 deduction

Difference

+$123,269 pulled forward into Year 1

At a 37% federal bracket, that's $52,725 in cash you keep instead of paying — a 35× return on the $1,495 study. Run it on your actual property below.

Run your numbers

Your property is probably not exactly $1M.

Plug in your actual purchase price, property type, age, and finish level on the homepage calculator. It uses the same engine — no signup, results in 60 seconds.

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If the math works for your property

Order your cost segregation study from $1,495.

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