$300K Rental: Your Cost Segregation Breakdown

Even a modest rental property contains thousands of dollars in reclassifiable building components that most investors leave on the table.

$43,200 Accelerated Depreciation

$15,984 Est. Year-1 Tax Savings

20x Return on Study Cost

Adjust Your Numbers

Property Type

Purchase Price

Depreciable Basis (80%) $240,000

Accelerated Depreciation $43,200

Est. Year-1 Tax Savings $15,984

Study Cost $795

Return on Study 20x

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MACRS Depreciation Breakdown

MACRS Class	Amount	% of Accelerated	Bonus Eligible
5-Year Property	$25,920	60%	Yes — 100%
7-Year Property	$4,320	10%	Yes — 100%
15-Year Property	$12,960	30%	Yes — 100%
27.5yr Property	$196,800	82%	No — standard schedule
Total Depreciable Basis	$240,000	100%	—

Method	Year-1 Deduction	Difference
Standard Straight-Line (27.5yr)	$8,727	—
With Cost Segregation + Bonus	$43,200	+$34,473

Estimated deduction based on typical cost segregation allocations for rental property properties. Actual study results may vary based on property-specific analysis including age, condition, renovations, and local construction costs.

What This Means for You

The conventional wisdom that cost segregation "isn't worth it" for properties under $500K is outdated. At $300K, a single-family rental still generates roughly $43K in accelerated depreciation — translating to about $16K in year-one tax savings against a study cost of $795. That's a 20x return.

The components that get reclassified in a typical SFR include: electrical outlets and wiring dedicated to appliances (5-year), cabinetry and countertops (5-year), carpet and vinyl flooring (5-year), decorative lighting fixtures (5-year), landscaping and irrigation (15-year), driveways and sidewalks (15-year), and fencing (15-year). These aren't obscure line items — they're standard features of any rental property.

The key consideration for long-term rental investors is the passive activity loss rules. If your adjusted gross income is under $150K, you can deduct up to $25K in passive losses against ordinary income. Above that threshold, you'll need other passive income to absorb the deductions — or you can carry them forward to offset gains when you sell.

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Compare: Rental Property at Different Price Points

Price	Accelerated	Tax Savings	Study Cost	ROI
$300K	$43,200	$15,984	$795	20x
$500K	$72,000	$26,640	$795	34x
$750K	$108,000	$39,960	$795	50x
$400K	$57,600	$21,312	$795	27x
$600K	$86,400	$31,968	$795	40x
$1M	$144,000	$53,280	$1,195	45x

Compare: $300,000 Across Property Types

Property Type	Accelerated	Tax Savings	Study Cost	ROI
Airbnb / Short-Term Rental	$81,600	$30,192	$795	38x
Rental Property	$43,200	$15,984	$795	20x

Frequently Asked Questions

What is a cost segregation study? ▼

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.

Can I use cost segregation deductions against my W-2 income? ▼

For long-term rentals, depreciation deductions are generally passive and can only offset passive income. However, there are two key exceptions: (1) if your AGI is under $150K, you can deduct up to $25K in passive losses against ordinary income, and (2) if you qualify as a Real Estate Professional (750+ hours/year in real estate), all rental income becomes non-passive. STR owners who materially participate can deduct against W-2 income regardless.

How long does a cost segregation study take? ▼

Our studies are delivered in 3-5 business days. You provide the property address, purchase price, and closing date — we handle everything else using assessor records, satellite imagery, and construction cost databases. No site visit or tenant disruption required.