ADVANIAccelerated depreciation, modeled before you buy.
A cost segregation study reclassifies parts of a property into shorter depreciation schedules — 5, 7, and 15-year property instead of 27.5 or 39 — which can front-load real, material tax savings in the early years of ownership.
Why it matters
Most owners depreciate a building on a straight line over decades. A cost segregation study identifies the portion of a purchase price attributable to shorter-lived components — site improvements, certain fixtures and finishes — and depreciates those on an accelerated schedule, often paired with bonus depreciation in the first year of ownership.
The calculator below walks a single-family or small multifamily owner through the same modeling, step by step, on their own purchase price — before they ever commission a formal study.
Cost segregation calculator.
Built for a single-family rental or a small (2–4 unit) multifamily property, from $1M to $10M. Every assumption is adjustable — work through it step by step, or jump straight to a slider.
This models only the federal year-one impact of pairing a cost segregation study with bonus depreciation, compared to standard 27.5-year straight-line depreciation on the whole building. It is illustrative only — see the disclosures at the bottom before relying on any number here.
| Asset Class | Recovery | % of Basis | Value | Year-1 Deduction |
|---|---|---|---|---|
| Land | — | N/A | ||
| Personal Property | 5-yr | |||
| Land Improvements | 15-yr | |||
| Building Structure | 27.5-yr SL | |||
| Total | ||||
Illustrative only. This calculator is a simplified planning estimate, not an engineering-based cost segregation study, and not tax, legal, or financial advice. Actual asset classification requires a site-specific study performed by a qualified cost segregation firm.
Federal only. This models federal tax impact alone. California does not conform to federal bonus depreciation, and most states apply their own depreciation rules — state-level savings are not calculated here and will differ, in many cases substantially.
Deferral, not elimination. Accelerated depreciation defers tax rather than eliminating it. Expect depreciation recapture on sale under IRC §1245 (personal property, generally taxed as ordinary income) and §1250 (real property, generally up to 25% for unrecaptured gain), regardless of your capital gains rate.
Rate approximations. The 38% ceiling on the tax-rate slider is a rounded illustrative cap, not an official bracket — the top federal individual marginal rate for 2026 is 37%, and a 3.8% Net Investment Income Tax may separately apply to rental income for higher earners. The 5-year and 15-year rows use approximate first-year MACRS half-year-convention rates (20% and 5%) on any basis not covered by bonus depreciation.
Eligibility varies. A property used at any point as a personal residence, held short-term, financed in a way that limits interest deductibility, or subject to passive-activity-loss limits may see a different — or no — current-year benefit from these deductions. Confirm actual asset allocations, recapture exposure, and your specific eligibility with a qualified cost segregation firm and your CPA before relying on any figure above.