$850K Condo: Your Cost Segregation Breakdown

Condos have a different depreciation profile than single-family homes — less site improvement, but strong interior component reclassification in the 5-year and 7-year categories.

$102,000Accelerated Depreciation

$37,740Est. Year-1 Tax Savings

47xReturn on Study Cost

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Property Type

Purchase Price

$79,254

Estimated Year-1 Tax Savings

$102,000

Accelerated Deductions

$795

Study Cost

47x

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$71,400

10.5%

7-Year Property$6,800

1.0%

15-Year Property$23,800

3.5%

27.5-Year Property$578,000

85.0%

Estimated Year-1 Tax Savings$79,254

Illustrative estimate. Final allocations vary based on property facts and report findings.

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

What This Means for You

$850K investment condo eligible for accelerated depreciation through cost segregation

An $850K condo is common in markets like Miami Beach, downtown San Diego, or urban Austin. These are typically 2-bedroom, 1,200-1,500 SF units in mid-rise or high-rise buildings with upgraded finishes — quartz countertops, hardwood flooring, designer fixtures, and modern appliances.

Condos present a unique cost segregation profile. While you own less of the building structure and site improvements compared to a single-family home, you still have significant interior personal property: kitchen cabinets and countertops, bathroom vanities, flooring, light fixtures, appliances, built-in shelving, and closet systems. Your share of common-area improvements — lobby finishes, parking structures, pool equipment — also qualifies for accelerated treatment.

At the 37% bracket, $102,000 in accelerated deductions generates $79,254 in year-one tax savings. The 15-year category is smaller than a detached home because the HOA owns most site improvements, but the strong interior component base still delivers a 47x return on the $795 study cost.

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Compare: $850,000 Across Property Types

Property Type	Accelerated	Tax Savings	Study Cost	ROI
$850K Condo	$102,000	$37,740	$795	47x
$500K Condo	$60,000	$22,200	$795	28x
$750K Rental	$108,000	$39,960	$795	50x
$1M Rental	$144,000	$53,280	$1,295	41x

Frequently Asked Questions

Does cost segregation work for condos?▼

Yes. While condos have less site improvement to reclassify than single-family homes, they still contain significant 5-year personal property in kitchens, bathrooms, and finishes. An $850K condo typically yields $102K in accelerated depreciation.

What about common-area improvements in a condo?▼

Your proportional share of common-area improvements — lobby finishes, parking structures, pool and gym equipment, security systems, elevators — can also be allocated to shorter MACRS classes.

Is cost segregation worth it on a condo used as a long-term rental?▼

Yes. Even as a long-term rental, the accelerated depreciation offsets rental income. If you qualify as a Real Estate Professional or your AGI is under $150K, you can also offset up to $25K against ordinary income.