$750K Rental: Your Cost Segregation Breakdown

A $750K rental property generates over $100K in accelerated depreciation — substantial enough to reshape your tax picture for multiple years.

$108,000 Accelerated Depreciation

$39,960 Est. Year-1 Tax Savings

50x Return on Study Cost

Adjust Your Numbers

Property Type

Purchase Price

Depreciable Basis (80%) $600,000

Accelerated Depreciation $108,000

Est. Year-1 Tax Savings $39,960

Study Cost $795

Return on Study 50x

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MACRS Depreciation Breakdown

MACRS Class	Amount	% of Accelerated	Bonus Eligible
5-Year Property	$64,800	60%	Yes — 100%
7-Year Property	$10,800	10%	Yes — 100%
15-Year Property	$32,400	30%	Yes — 100%
27.5yr Property	$492,000	82%	No — standard schedule
Total Depreciable Basis	$600,000	100%	—

Method	Year-1 Deduction	Difference
Standard Straight-Line (27.5yr)	$21,818	—
With Cost Segregation + Bonus	$108,000	+$86,182

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 $750K, a single-family rental contains a significant amount of reclassifiable building components. The cost segregation study typically identifies $108K in accelerated depreciation — generating approximately $40K in year-one tax savings. These deductions can carry forward if they exceed your current-year passive income.

Properties in this price range are often in high-appreciation markets where investors prioritize long-term equity growth alongside cash flow. Markets like suburban Austin, Raleigh-Durham, or Boise attract investors paying $750K for newer SFRs with premium finishes. The newer the construction, the more detailed the component-level cost data — which actually improves the precision of the cost segregation analysis.

One strategic consideration at this price point: if you plan to hold the property for 10+ years, cost segregation gives you the full benefit of accelerated deductions upfront while the depreciation recapture tax (25% rate) doesn't come due until you sell. With proper 1031 exchange planning, you may defer that recapture indefinitely.

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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: $750,000 Across Property Types

Property Type	Accelerated	Tax Savings	Study Cost	ROI
Airbnb / Short-Term Rental	$204,000	$75,480	$795	95x
Rental Property	$108,000	$39,960	$795	50x

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.

What about depreciation recapture when I sell? ▼

When you sell a property, the IRS recaptures accelerated depreciation at a maximum rate of 25%. However, the time value of money strongly favors taking the deduction now: $50K in tax savings today is worth far more than paying $12,500 in recapture tax years later. Additionally, a 1031 exchange can defer recapture indefinitely.