Cost segregation on a $2M Retail reclassifies $300,000 into accelerated depreciation.
Engineering-based study using industry-standard 2026 construction 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.
How the $300,000 splits across 5-, 7-, and 15-year property.
These percentages are illustrative for a retail of this size and age. Your study reports component-level detail so your CPA can place each item on the correct depreciation schedule.
5-year property
Personal property: appliances, carpet, FF&E, decorative finishes. Fully bonus-eligible at 100% under OBBBA (2025+).
7-year property
Office furniture, certain equipment, specialty fixtures. Also bonus-eligible.
15-year property
Land improvements: driveways, fencing, landscaping, site lighting. Bonus-eligible.
Without a study vs. with one.
At a 37% federal bracket, that's $111,000 in cash you keep instead of paying — a 34× return on the $3,295 study. Run it on your actual property below.
The $2M retail at four federal brackets.
The headline figure assumes the top 37% bracket. Most owners are not in it, so here is the same $300,000 Year-1 deduction valued at other federal rates, before and after the $3,295 study fee. State income tax comes on top where your state conforms to federal bonus depreciation.
| Federal bracket | Year-1 tax value | After the $3,295 fee |
|---|---|---|
| 24% | $72,000 | $68,705 |
| 32% | $96,000 | $92,705 |
| 35% | $105,000 | $101,705 |
| 37% | $111,000 | $107,705 |
A $2M purchase price falls in the $1M–$3M band of our Standard Commercial pricing, a flat $3,295. At $3,000,000 and above the next band applies ($4,995). See the full pricing table.
Depreciation on a $1,500,000 basis, with and without the study.
The Year-1 reclassification of $300,000 equals about 7.8 years of standard 39-year depreciation on this property. After Year 1 the study's annual deduction is smaller, because the reclassified $300,000 has already been taken and only the $1,200,000 remaining building basis is still depreciating. Full years shown; the purchase year is shorter under the mid-month convention.
| Year | No study | With study | Cumulative extra deduction |
|---|---|---|---|
| Year 1 | $38,462 | $330,769 | $292,308 |
| Year 2 | $38,462 | $30,769 | $284,615 |
| Year 3 | $38,462 | $30,769 | $276,923 |
| Year 4 | $38,462 | $30,769 | $269,231 |
| Year 5 | $38,462 | $30,769 | $261,538 |
The cumulative gap narrows by $7,692 a year and closes over the recovery period; cost segregation changes when you deduct, not how much. Depreciation taken is generally recaptured on a taxable sale.
- $1.5M retail strip center: $225,000 reclassified on a $1,125,000 basis
- The retail cost segregation guide explains which components drive these numbers.
Your property is probably not exactly $2M.
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.