How much can a $3M office building actually save in Year 1?

On a $3M purchase price with a 25% land allocation, the depreciable basis is $2,250,000. An engineering-based cost segregation study reclassifies about $427,500 (19% of basis) into 5-, 7-, and 15-year property — yielding roughly $158,175 in Year-1 federal tax savings at the 37% marginal bracket. Standard 27.5/39-year depreciation produces only $57,692 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 $2,995. With ~$158,175 in projected Year-1 tax savings, the return on the study cost is roughly 53× — 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 Building

Cost segregation on a $3M Office Building reclassifies $427,500 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

$427,500

19% of $2,250,000 basis

Year-1 federal tax savings

$158,175

at 37% marginal bracket

Return on study cost

53×

study fee $2,995

MACRS class breakdown

How the $427,500 splits across 5-, 7-, and 15-year property.

These percentages are illustrative for a office building 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

$192,375

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

7-year property

$64,125

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

15-year property

$171,000

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

Year-1 deduction comparison

Without a study vs. with one.

Standard depreciation

2,250,000 ÷ 39 years

$57,692

Year-1 deduction (no study)

With cost seg + 100% bonus

5/7/15-yr accelerated

$427,500

Year-1 deduction

Difference

+$369,808 pulled forward into Year 1

At a 37% federal bracket, that's $158,175 in cash you keep instead of paying — a 53× return on the $2,995 study. Run it on your actual property below.

Run your numbers

Your property is probably not exactly $3M.

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 $2,995.

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