$3M Multifamily: Your Cost Segregation Breakdown

A $3M apartment complex generates $456K in accelerated depreciation — with $168K+ in year-one tax savings at the 37% bracket.

$456,000Accelerated Depreciation

$168,720Est. Year-1 Tax Savings

68xReturn on Study Cost

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Property Type

Purchase Price

$293,040

Estimated Year-1 Tax Savings

$456,000

Accelerated Deductions

$2,495

Study Cost

68x

ROI on Study

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Estimates are for illustration only. Details

MACRS Depreciation Breakdown

Accelerated Depreciation by MACRS Class

Total reclassified from standard depreciation

5-Year Property$264,000

11.0%

7-Year Property$48,000

2.0%

15-Year Property$144,000

6.0%

27.5-Year Property$1,944,000

81.0%

Estimated Year-1 Tax Savings$293,040

Illustrative estimate. Final allocations vary based on property facts and report findings.

Estimated deduction based on typical cost segregation allocations. Actual study results may vary based on property-specific analysis.

What This Means for You

A $3M multifamily asset is typically a 16-24 unit apartment complex in markets like Phoenix, San Antonio, or suburban Nashville. At this scale, the per-unit component count multiplied by 16-24 units creates a substantial reclassification base.

Each unit contributes kitchen cabinets, countertops, appliances, bathroom vanities, flooring, light fixtures, ceiling fans, and window treatments. Common-area components scale with building size: parking lot, exterior lighting, mailbox stations, laundry facilities, fire suppression components, and signage.

At $3M, the study cost moves to $2,495, but the $293,040 in year-one tax savings still delivers a 68x return. For syndicators and fund managers, this depreciation flows through to investors on their K-1s.

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Compare: Multifamily at Different Price Points

Price	Accelerated	Tax Savings	Study Cost	ROI
$2M	$304,000	$112,480	$1,495	75x
$3M	$456,000	$168,720	$2,495	68x
$4M	$608,000	$224,960	$2,495	90x
$5M	$760,000	$281,200	$2,495	113x

Frequently Asked Questions

How does cost segregation help multifamily syndicators?▼

The accelerated depreciation flows through to investors on K-1 schedules, increasing their tax-sheltered returns.

What is the study cost for a $3M apartment building?▼

The study costs $2,495 for multifamily properties between $3M and $8M.

Can I combine cost segregation with a 1031 exchange?▼

Yes, but the depreciation recapture rules interact with 1031 exchanges. Consult your CPA for guidance specific to your exchange timeline.