$4M Multifamily: Your Cost Segregation Breakdown

A $4M apartment complex generates $608K in accelerated depreciation — delivering $224K+ in year-one tax savings and a 90x return on the study cost.

$608,000Accelerated Depreciation

$224,960Est. Year-1 Tax Savings

90xReturn on Study Cost

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Property Type

Purchase Price

$390,720

Estimated Year-1 Tax Savings

$608,000

Accelerated Deductions

$2,495

Study Cost

90x

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$352,000

11.0%

7-Year Property$64,000

2.0%

15-Year Property$192,000

6.0%

27.5-Year Property$2,592,000

81.0%

Estimated Year-1 Tax Savings$390,720

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 $4M multifamily property is typically a 24-40 unit apartment complex in growth markets like Tampa, Raleigh-Durham, or suburban Dallas. These mid-size apartments are large enough for professional management, small enough for individual syndicators.

At this scale, every unit component multiplies: 30+ kitchens, 40+ bathrooms, thousands of square feet of flooring. Common-area improvements grow proportionally — larger parking lots, more extensive landscaping, community amenities like fitness centers or pools.

The $608,000 in accelerated deductions at the 37% bracket generates $390,720 in year-one tax savings. For a $2,495 study cost, that is a 90x return.

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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

What is the study cost for a $4M multifamily?▼

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

How does cost segregation work with syndicated properties?▼

The accelerated depreciation flows through to each limited partner on their K-1 based on their ownership percentage.

Is cost segregation standard for institutional multifamily?▼

Yes. Virtually all institutional and syndicated multifamily acquisitions include a cost segregation study as part of the closing process.