Cost segregation calculator
What would a study save you this year?
Enter the purchase price, land value and the date the rental was ready. The estimate uses the IRS depreciation tables, the bonus rate for your dates, and the reclassification range typical for your property type.
Estimated tax savings on your 2026 return
Example property$30k – $43k
From $95k–$134k of extra depreciation, compared with $7,091 without a study.
| Depreciation | 2026 deduction | 5 years |
|---|---|---|
| No study | $7,091 | $59,455 |
| With a study, low | $102,376 | $140,602 |
| With a study, high | $141,196 | $173,662 |
Where your $360,000 of basis goes with a study
- 5-year items
- $82,800
- 15-year site work
- $54,000
- 27.5-year building
- $223,200
Express Study from $895
About 41× its cost in year one
- Uses 100% bonus depreciation, available for homes bought and placed in service after Jan 19, 2025.
- Long-term rental losses are passive. They offset W-2 income only with real estate professional status or the $25k allowance (phases out above $100k income). Unused losses carry forward.
Getting an accurate number
- 1
Use your closing statement
Purchase price is the contract price plus capitalized closing costs like title, recording and transfer fees. Loan costs are amortized separately, so leave them out.
- 2
Find the land value
Your county assessor's bill splits land and improvements. Apply that land percentage to your purchase price. The 20% shortcut is fine for a first look, not for filing.
- 3
Pick the right date
Depreciation starts when the home is ready and offered for rent, not when the first tenant moves in. A December closing with a January rehab finish belongs to next year.
- 4
Choose the year you file
If the rental went into service in an earlier year, the calculator rolls the missed depreciation into a Form 3115 catch-up on the return you pick.
What the calculator does
It splits your depreciable basis (price minus land, plus renovations) into 5-year personal property, 15-year land improvements and the building, using the range studies typically find for that property type.
Bonus depreciation applies to the 5- and 15-year parts. The building stays on its 27.5- or 39-year straight-line schedule with the mid-month convention, the same way your CPA computes it.
Tax savings are the extra deduction times your federal bracket plus any state rate you enter. That assumes you can use the loss this year. If you can't, the deduction carries forward rather than disappearing.
Reading the three rows
No study is the default schedule.Low and high bracket the share of basis studies usually move for that property type. Furnished homes, newer finishes and more site work land closer to high.
Questions
What is a cost segregation study, in plain terms?
By default, the IRS treats your whole rental as one building and spreads its cost over 27.5 years (or 39 for most short-term rentals). That isn't how a house is built. Carpet, appliances, cabinets that aren't built in, light fixtures, the fence and the driveway wear out much faster.
A study identifies those parts and puts them on 5-year and 15-year schedules. With bonus depreciation, those shorter-life parts can be deducted in the first year instead of trickling in over decades.
Which rentals qualify?
Any residential property you rent out or hold to rent: single-family homes, condos, townhouses, duplexes to fourplexes, apartment buildings, cabins, ADUs, and the rented part of a home you live in. It must have been placed in service after 1986.
Your own home doesn't qualify while you live in it. When you convert it to a rental, depreciation starts on the lower of what you paid (plus improvements) or its market value on the conversion date.
Is a study worth it on a smaller rental?
Usually, yes, once the depreciable basis (price minus land, plus improvements) is above about $150,000 and you can use the losses this year or soon. A $300,000 house with $60,000 of land often produces $60,000–$90,000 of extra first-year depreciation.
It's often not worth it if you plan to sell within a year or two, if land is most of the value, or if you're in a low bracket with no way to use the losses. The calculator shows the trade-off, and we'll tell you if the fee doesn't pay for itself.
What's the deal with 100% bonus depreciation?
The One Big Beautiful Bill Act, signed July 4, 2025, made 100% bonus depreciation permanent for property acquired and placed in service after January 19, 2025. Only the 5-, 7- and 15-year parts a study identifies qualify; the building itself never does.
Homes under a binding purchase contract before January 20, 2025 keep the older phase-down: 60% if placed in service in 2024, 40% in 2025, 20% in 2026. You can also elect out of bonus by asset class if a smaller first-year deduction suits your plans better.
Other calculators: rental property, Airbnb & STR, bonus depreciation, renovation
Find out what your rental is worth on this year’s return
A free proposal with your estimated savings and a fixed fee, usually within one business day. Studies start at $895.