$600K Rental: Your Cost Segregation Breakdown

A $600K rental property generates substantial accelerated depreciation — enough to shelter significant rental income or create carryforward losses for future years.

$86,400 Accelerated Depreciation

$31,968 Est. Year-1 Tax Savings

40x Return on Study Cost

Adjust Your Numbers

Property Type

Purchase Price

Depreciable Basis (80%) $480,000

Accelerated Depreciation $86,400

Est. Year-1 Tax Savings $31,968

Study Cost $795

Return on Study 40x

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MACRS Depreciation Breakdown

MACRS Class	Amount	% of Accelerated	Bonus Eligible
5-Year Property	$51,840	60%	Yes — 100%
7-Year Property	$8,640	10%	Yes — 100%
15-Year Property	$25,920	30%	Yes — 100%
27.5yr Property	$393,600	82%	No — standard schedule
Total Depreciable Basis	$480,000	100%	—

Method	Year-1 Deduction	Difference
Standard Straight-Line (27.5yr)	$17,455	—
With Cost Segregation + Bonus	$86,400	+$68,945

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 $600K, a single-family rental delivers approximately $86K in accelerated depreciation through cost segregation — generating about $32K in first-year tax savings. The study cost of $795 represents less than 2.5% of the tax benefit, making this one of the highest-ROI professional services an investor can purchase.

Properties at this price point tend to have upgraded finishes that translate to higher reclassifiable values: hardwood or luxury vinyl plank flooring, quartz or granite countertops, custom cabinetry, upgraded plumbing fixtures, tankless water heaters, and energy-efficient HVAC systems. All of these qualify as 5-year or 7-year personal property under MACRS.

Portfolio investors who acquire properties in the $500K-$700K range find that cost segregation becomes a systematic tool. Each acquisition adds another layer of accelerated deductions, and the cumulative effect across 3-5 properties can shelter most or all rental income — or create substantial passive loss carryforwards that reduce capital gains tax when properties are sold.

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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: $600,000 Across Property Types

Property Type	Accelerated	Tax Savings	Study Cost	ROI
Airbnb / Short-Term Rental	$163,200	$60,384	$795	76x
Rental Property	$86,400	$31,968	$795	40x
Fourplex	$91,200	$33,744	$995	34x

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.

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.