How much can a $500K single-family rental actually save in Year 1?

On a $500K purchase price with a 20% land allocation, the depreciable basis is $400,000. An engineering-based cost segregation study reclassifies about $80,000 (20% of basis) into 5-, 7-, and 15-year property — yielding roughly $29,600 in Year-1 federal tax savings at the 37% marginal bracket. Standard 27.5/39-year depreciation produces only $14,545 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 $795. With ~$29,600 in projected Year-1 tax savings, the return on the study cost is roughly 37× — 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 · Single-Family Rental

Cost segregation on a $500K Single-Family Rental reclassifies $80,000 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

$80,000

20% of $400,000 basis

Year-1 federal tax savings

$29,600

at 37% marginal bracket

Return on study cost

37×

study fee $795

MACRS class breakdown

How the $80,000 splits across 5-, 7-, and 15-year property.

These percentages are illustrative for a single-family rental of this size and age. Your study reports component-level detail so your CPA can place each item on the correct depreciation schedule.

60%

10%

30%

5-year property

$48,000

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

7-year property

$8,000

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

15-year property

$24,000

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

Year-1 deduction comparison

Without a study vs. with one.

Standard depreciation

400,000 ÷ 27.5 years

$14,545

Year-1 deduction (no study)

With cost seg + 100% bonus

5/7/15-yr accelerated

$80,000

Year-1 deduction

Difference

+$65,455 pulled forward into Year 1

At a 37% federal bracket, that's $29,600 in cash you keep instead of paying — a 37× return on the $795 study. Run it on your actual property below.

Run your numbers

Your property is probably not exactly $500K.

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 $795.

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