Atlanta, GA · $420K
1990s build, recent reno
Year-1 federal benefit
$19,900
Single-Family Rental
SFR cost segregation: $30K–$100K Year-1 deductions.
Conservative landlords care about CPA approval. The methodology is the same one large firms use — we just deliver it faster.
The 30-second answer
Single-family rental cost segregation is an engineering-based study that reclassifies a rental house's components out of the default 27.5-year residential schedule into faster 5- and 15-year MACRS classes. It fits landlords who own a long-term rental, because the appliances, carpet and flooring, fixtures and cabinetry (5-year) plus the driveway, landscaping, fencing, and site work (15-year) depreciate far faster than the 27.5-year building. A single-family rental typically reclassifies 15–20% of building basis. With 100% bonus depreciation that amount is deductible in Year 1 — but the loss is passive under IRC §469, so it offsets passive income unless you qualify as a real estate professional or materially participate; confirm your situation with your CPA.
SFR cost segregation reclassifies 15–20% of depreciable basis from the 27.5- or 39-year shell into 5-, 7-, and 15-year MACRS classes per 26 U.S.C. § 168 and Rev. Proc. 87-56. Under OBBBA's permanent 100% bonus depreciation (placed-in-service 2025+), reclassified components are deductible in year one. All credible cost-seg providers use the same federal framework — industry-standard 2026 construction cost data, MACRS classification, IRS Audit Techniques Guide (Pub 5653) compliance. What differs across property types is land-allocation share, FF&E weight, and material-participation eligibility under §469.
| Property type | Reclass to 5/7/15-yr | Year-1 federal benefit | Study cost |
|---|---|---|---|
| STR | 23–29% | $55K–$205K | From $495 |
| SFR this page | 15–20% | $30K–$100K | From $495 |
| Condo | 11–17% | $17K–$61K | From $495 |
| Duplex | 14–19% | $33K–$98K | From $795 |
| Fourplex | 17–21% | $68K–$165K | From $795 |
| Office | 17–21% | $100K–$535K | From $1,995 |
| Retail | 21–27% | $105K–$570K | From $1,995 |
| Industrial | 16–20% | $95K–$680K | From $2,495 |
| Self-storage | 20–26% | $170K–$1.3M | From $2,495 |
| Medical office | 16–23% | $95K–$485K | From $2,495 |
| Mixed-use | 12–19% | $71K–$480K | From $1,995 |
| Multifamily | 15–21% | $48K–$150K | From $795 |
| Multifamily 5+ | 15–20% | $120K–$800K | From $1,995 |
| Triplex | 15–19% | $48K–$120K | From $795 |
| Restaurant | 16–24% | $81K–$405K | From $2,495 |
| Vet | 20–26% | $100K–$440K | From $2,495 |
| Gym | 19–35% | $110K–$890K | From $2,495 |
| Dealership | 26–36% | $550K–$3.6M | From $2,495 |
| ADU | 7–12% | $8K–$33K | From $495 |
| Commercial | 18–27% | $105K–$685K | From $1,995 |
| Data center | 45–60% | $3.0M–$31M | $4,995–$54,995 (sub-$100M); $100M+ by proposal |
| Senior living | 20–30% | $340K–$2.0M | By proposal |
Reclassification ranges from internal benchmarks across 4,000+ studies; Year-1 federal benefit assumes 37% bracket and full first-year usability. Study costs are Cost Seg Smart pricing — comparable engineering studies elsewhere range $5,000–$15,000+. See full provider comparison.
Real examples
What sfr cost seg looks like in practice.
Estimates assume 37% federal bracket and full first-year usability of the loss (active income offset or REPS). Your actual benefit varies with bracket, basis allocation, and CPA's treatment.
Good fit when…
- ✓Landlords with REPS (real estate professional status) or active income to offset against current losses
- ✓Properties bought 2+ years ago where a Form 3115 lookback can recapture missed depreciation in one year
- ✓Owners in the 32%+ federal bracket where the cash benefit clearly justifies the study fee
Skip it when…
- ×Properties under ~$150K basis — the study fee starts to consume the benefit
- ×Investors planning to sell within 12 months (depreciation recapture eats the benefit on sale)
Estimate
Run the numbers on your sfr.
Pre-set to SFR defaults — adjust price + bracket to match your property.
Estimated Year-1 tax savings · Click to order →
$23,680
on $64,000 of accelerated deductions
Want this in writing for your CPA? Get a 1-page analysis →5-yr15-yr27.5/39-yr
Study cost
$895
ROI on study
26×
Delivery
< 1 hour
Estimate based on industry-standard 2026 construction cost data and IRC §168(k). Your actual result varies with property age, condition, and basis allocation.
Before you order
Not sure if a study makes sense for your SFR?
Free 1-page tool: when ordering pays, when it doesn't, plus the 3 numbers your CPA needs to file.
Frequently asked
SFR cost segregation, by question.
Do single-family rentals qualify for cost segregation?
Yes. Any rental house you own can be studied — the appliances, flooring, fixtures, and cabinetry reclassify to 5-year property and the driveway, landscaping, and fencing to 15-year, out of the 27.5-year residential schedule. A single-family rental typically reclassifies 15–20% of building basis, which is fully deductible in Year 1 under 100% bonus depreciation.
Can I use the deduction against my W-2 income?
Usually not directly. A long-term rental loss is passive under IRC §469, so it offsets passive income unless you qualify as a real estate professional or materially participate. A short-term rental (average guest stay of 7 days or less) where you materially participate is treated differently and can offset active income. This is the single most important question to confirm with your CPA before ordering.
How much does a single-family rental study cost?
Single-family rentals are priced by value: from $495 for a sub-$300K property, $895 for $300K–$700K, and $995 up to $1M, delivered as a CPA-ready PDF in under an hour. No site visit required.
I bought the rental years ago — is it too late?
No. A lookback study lets you claim missed depreciation via Form 3115 on your current-year return under the IRS automatic-consent procedures, with no amended returns. The cumulative catch-up flows through in a single year.
Regulation references
The rules that govern sfr cost segregation.
- Real estate professional status (REPS) — the 750-hour and 51% tests under 26 U.S.C. § 469(c)(7), and the seven material participation tests under Treas. Reg. § 1.469-5T. Required to offset W-2 income with long-term rental losses unless the property qualifies under the STR loophole.
- Form 3115 (catch-up depreciation) — how to apply cost segregation to a property placed in service in a prior year. Full § 481(a) catch-up adjustment, automatic change-number 7, no IRS user fee.
- Treas. Reg. § 1.469-1T — full reference — all six (A)–(F) exceptions that reclassify a rental as non-rental for passive activity loss purposes.
- Regulations hub — full canonical reference for all cost segregation regulations.
- irsdepreciationrules.com — companion plain-language reference for the underlying IRS depreciation statutes (operated by Cost Seg Smart).
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