Duplex to fourplex
Cost segregation for duplexes, triplexes and fourplexes
Every unit has its own kitchen, appliances, bathrooms and flooring, so small multifamily reclassifies more per dollar than a single house. Express Studies cover up to four similar units.
What usually moves to 5 and 15 years
Typical range: 26–35% of depreciable basis.
- A full set of appliances per unit
- Cabinets, counters and vanities in each kitchen and bath
- Separate electrical service and metering for appliances
- Flooring and window treatments across every unit
- Shared parking, walkways, fencing and site lighting
- Laundry equipment, mailboxes and exterior signage
Worked example
Fourplex, long-term leases
In service March 2026, 32% federal bracket
| Purchase price | $780,000 |
| Less land | ($140,000) |
| Depreciable basis | $640,000 |
| Year-one depreciation, no study | $18,424 |
| Year-one depreciation, with a study | $180,034–$235,976 |
| Estimated tax savings | $51,715–$69,616 |
Illustration computed with our calculator, not a client result. Express Study fee from $895. Assumes the loss is usable this year.
Living in one unit?
Only the rented share is depreciable. Square footage is the cleanest way to split it. Shared spaces you also use stay on the personal side. A study on a house hack covers just the rental portion.
Units bought at different times
Express Studies need units with similar layouts and one placed-in-service date. Mixed layouts or staggered renovations go to the Engineered Study.
Run your own numbers
Estimated tax savings on your 2026 return
Example property$52k – $70k
From $162k–$218k of extra depreciation, compared with $18,424 without a study.
| Depreciation | 2026 deduction | 5 years |
|---|---|---|
| No study | $18,424 | $111,515 |
| With a study, low | $180,034 | $248,921 |
| With a study, high | $235,976 | $296,485 |
Where your $640,000 of basis goes with a study
- 5-year items
- $172,800
- 15-year site work
- $51,200
- 27.5-year building
- $416,000
Express Study from $895
About 68× 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.
Questions
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.
Can these losses offset my W-2 income?
Not automatically. Rental losses are passive by default, so they offset passive income first and carry forward if unused. There are three ways to use them against wages.
First, the short-term rental route: if the average guest stay is 7 days or less and you materially participate (commonly 100+ hours and more than anyone else, cleaners included), the activity is not treated as passive.
Second, real estate professional status: more than 750 hours a year and more than half your working time in real estate, plus material participation in the rentals.
Third, the $25,000 allowance for active landlords, which phases out between $100,000 and $150,000 of modified adjusted gross income. Your CPA decides which applies to you.
What does a study cost?
The Express Study starts at $895 for single-family homes, condos, townhouses and up-to-four-unit properties with a depreciable basis under $1.2 million and under $80,000 of renovations. The Engineered Study starts at $1,950 and covers everything else, including apartment buildings and heavily renovated homes.
Your proposal states a fixed fee before you pay anything. No contingency fees, which the IRS treats as a red flag.
Do renovations count?
Yes. Capital improvements (remodels, new flooring, appliances, decks, fencing, landscaping) add to your basis and often contain a high share of 5- and 15-year property. Routine repairs don't belong in a study; they're deducted as repairs.
If you replaced something that was already being depreciated, like a roof or cabinets, the remaining basis of the old item can often be written off through a partial disposition election. Don't include costs you already expensed, or they'll be counted twice.
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.