$500K Duplex: Your Cost Segregation Breakdown

Duplexes offer a unique cost segregation advantage: two sets of kitchens, bathrooms, and appliances mean more personal property to reclassify.

$76,000 Accelerated Depreciation

$28,120 Est. Year-1 Tax Savings

28x Return on Study Cost

Adjust Your Numbers

Property Type

Purchase Price

Depreciable Basis (80%) $400,000

Accelerated Depreciation $76,000

Est. Year-1 Tax Savings $28,120

Study Cost $995

Return on Study 28x

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MACRS Depreciation Breakdown

MACRS Class	Amount	% of Accelerated	Bonus Eligible
5-Year Property	$44,080	58%	Yes — 100%
7-Year Property	$9,120	12%	Yes — 100%
15-Year Property	$22,800	30%	Yes — 100%
27.5yr Property	$324,000	81%	No — standard schedule
Total Depreciable Basis	$400,000	100%	—

Method	Year-1 Deduction	Difference
Standard Straight-Line (27.5yr)	$14,545	—
With Cost Segregation + Bonus	$76,000	+$61,455

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

What This Means for You

A $500K duplex is one of the most efficient property types for cost segregation. Because each unit contains its own full set of depreciable components — kitchen cabinets, countertops, appliances, bathroom fixtures, flooring, and lighting — a duplex effectively doubles the personal property inventory compared to a single-family rental at the same price.

The typical cost segregation study on a $500K duplex reclassifies roughly $76K into accelerated MACRS classes. The split skews slightly higher toward 7-year property (12% vs. 10% for SFR) because duplexes tend to have more shared-system components like HVAC units, water heaters, and electrical panels that serve both units.

For house-hackers living in one unit and renting the other, cost segregation applies to the entire property basis — not just the rented portion. The IRS allows depreciation on the full property as long as at least one unit is rented. This makes duplexes particularly attractive for investors who want to live in their investment while maximizing tax benefits.

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IRS Compliant Methodology aligned with IRS Audit Techniques Guide

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Compare: $500,000 Across Property Types

Property Type	Accelerated	Tax Savings	Study Cost	ROI
Airbnb / Short-Term Rental	$136,000	$50,320	$795	63x
Rental Property	$72,000	$26,640	$795	34x
Duplex	$76,000	$28,120	$995	28x
Condo	$60,000	$22,200	$795	28x
Triplex	$76,000	$28,120	$995	28x

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.

Why are duplexes especially good for cost segregation? ▼

Duplexes contain two complete sets of kitchens, bathrooms, appliances, and fixtures — doubling the personal property inventory compared to a single-family home at the same price. This means a higher percentage of the property's depreciable basis falls into accelerated MACRS classes. The IRS allows depreciation on the entire property as long as at least one unit is rented.

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.