$400K Rental: Your Cost Segregation Breakdown

A $400K rental property is the most common entry point for serious SFR investors — and cost segregation is where the tax advantage really kicks in.

$57,600 Accelerated Depreciation

$21,312 Est. Year-1 Tax Savings

27x Return on Study Cost

Adjust Your Numbers

Property Type

Purchase Price

Depreciable Basis (80%) $320,000

Accelerated Depreciation $57,600

Est. Year-1 Tax Savings $21,312

Study Cost $795

Return on Study 27x

Order Your Study →

MACRS Depreciation Breakdown

MACRS Class	Amount	% of Accelerated	Bonus Eligible
5-Year Property	$34,560	60%	Yes — 100%
7-Year Property	$5,760	10%	Yes — 100%
15-Year Property	$17,280	30%	Yes — 100%
27.5yr Property	$262,400	82%	No — standard schedule
Total Depreciable Basis	$320,000	100%	—

Method	Year-1 Deduction	Difference
Standard Straight-Line (27.5yr)	$11,636	—
With Cost Segregation + Bonus	$57,600	+$45,964

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

At $400K, a single-family rental generates roughly $57K in accelerated depreciation through cost segregation — producing about $21K in first-year tax savings. The study costs $795, delivering a 26x return. This is the price point where most investors first realize that cost segregation isn't just for commercial real estate.

The typical $400K rental is a 3-bed/2-bath in a suburban growth market — think the outer suburbs of Dallas, Atlanta, Charlotte, or Nashville. These properties feature standard residential components that all qualify for accelerated depreciation: kitchen cabinets and countertops, bathroom vanities and fixtures, carpet and vinyl flooring, garage doors, irrigation systems, driveways, and landscaping.

For investors with AGI under $100K, up to $25K of the accelerated depreciation can offset W-2 income directly through the passive loss allowance. Above $150K AGI, the deductions carry forward as suspended passive losses — released when you generate passive income from this or other rentals, or fully deducted when you sell the property.

✅

IRS Compliant Methodology aligned with IRS Audit Techniques Guide

📈

CPA-Ready Reports 30-40 page PDF your CPA can file directly

💰

Money-Back Guarantee Full refund if the study doesn't save you money

📄

See a Sample Download sample report

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: $400,000 Across Property Types

Property Type	Accelerated	Tax Savings	Study Cost	ROI
Airbnb / Short-Term Rental	$108,800	$40,256	$795	51x
Rental Property	$57,600	$21,312	$795	27x

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.

Is cost segregation worth it if I only have one rental property? ▼

Yes. The economics of cost segregation are determined by the property value and your tax bracket, not the number of properties you own. A single $400K rental property typically generates $21K in first-year tax savings — more than enough to justify the $795 study cost. The deductions carry forward if they exceed your current-year passive income.