Property Cost Segregation Calculator

Property Information

Enter your property acquisition details.

Property Name

Property Address

Property Type ⓘProperty type affects default cost segregation allocations. Commercial properties typically have higher percentages eligible for accelerated depreciation.

Year Acquired

Condition ⓘNewer or recently renovated properties may have more identifiable short-life components for cost segregation.

Purchase Price ⓘThe total acquisition cost of the property, including negotiated purchase price.

Land Value ⓘLand is not depreciable. Typically 15-25% of purchase price. Check your county appraisal or closing docs for the assessed land value.

Closing Costs Added to Basis

Depreciable Basis ⓘDepreciable Basis = Purchase Price - Land Value + Closing Costs. This is the total amount that can be depreciated over the life of the property. $280,000

Allocation Breakdown

Percentage of basis in each asset class.

5yr

7yr

15yr

27.5yr

0% 100% 100%

5-Year Property ⓘIncludes carpeting, appliances, decorative lighting, window treatments, certain cabinetry, and specialty electrical systems. 8%

7-Year Property ⓘFurniture, fixtures, office equipment, security systems, and certain land improvements like specialized landscaping. 4%

15-Year Property ⓘLandscaping, parking lots, sidewalks, fencing, outdoor lighting, drainage systems, retaining walls, and signage. 5%

Building Structure ⓘStructural walls, roof structure, foundation, HVAC core, plumbing core, and electrical core. Depreciated over 27.5 years (residential) or 39 years (commercial). 83%

83.0% Auto-calculated remainder

Tax Assumptions

Your marginal tax rates and bonus depreciation.

Federal Tax Bracket ⓘYour marginal federal income tax rate. Higher brackets benefit more from accelerated depreciation deductions.

State Income Tax Rate (%)

Texas has no state income tax

Combined Effective Rate 24.0%

Bonus Depreciation ⓘBonus depreciation allows you to deduct a large percentage of eligible asset costs in Year 1. It phases down: 100% (pre-2023), 80% (2023), 60% (2024), 40% (2025), 20% (2026), 0% (2027+). Applies to assets with recovery periods of 20 years or less.

Cost of Segregation Study ⓘProfessional cost segregation studies typically cost $5,000-$15,000 depending on property size and complexity. The study cost is itself tax-deductible.

NPV Discount Rate (%)

Year 1 Savings

vs. standard

5-Year Savings

cumulative

Extra Year 1 Deduction

additional

NPV of Acceleration

at 5% discount

Study Break-Even

Yr 1

pays for itself

Study ROI

5-year return

Depreciation Comparison (Years 1-10)

Allocation Breakdown

Cumulative Tax Savings Over Time

Side-by-Side Comparison

Standard straight-line vs. cost segregation with bonus depreciation

Period	Standard Deduction	Cost Seg Deduction	Standard Tax Savings	Cost Seg Tax Savings	Benefit

Year-by-Year Depreciation Schedule

Detailed breakdown by asset class (MACRS half-year convention)

Year	5-Yr Property	7-Yr Property	15-Yr Property	Building	Total	Tax Savings

IRS Asset Categories Reference

What falls into each depreciation category

5-Year Property

Carpeting, appliances, decorative lighting, window treatments, certain cabinetry, specialty electrical, removable countertops

7-Year Property

Furniture, fixtures, office equipment, security systems, certain specialized landscaping, shelving, decorative millwork

15-Year Property

Landscaping, parking lots, sidewalks, fencing, outdoor lighting, drainage systems, retaining walls, signage, site utilities

27.5/39-Year Structure

Structural walls, roof structure, foundation, HVAC core systems, plumbing core, electrical core, load-bearing components

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Depreciation Recapture Notice

When you sell the property, depreciation taken is subject to recapture tax. Section 1250 recapture on real property is taxed at a maximum rate of 25%. Section 1245 recapture on personal property (5, 7, 15-year assets) is taxed as ordinary income. Cost segregation accelerates deductions but does not eliminate the eventual tax — it defers it, providing a time-value-of-money benefit.

Disclaimer: This calculator provides estimates for educational purposes only. It is not tax, legal, or financial advice. Cost segregation studies should be performed by qualified engineers and CPAs. Consult a tax professional before making decisions based on these estimates. Actual results depend on property-specific factors, IRS regulations, and individual tax situations. MACRS rates shown use the half-year convention; mid-quarter convention may apply if more than 40% of depreciable assets are placed in service in the last quarter.