Free Tool

Cost Seg & Depreciation Estimator

A cost segregation study breaks a building into its parts. The short-life pieces, think flooring, cabinets, fixtures, and land improvements, qualify for 100% bonus depreciation under §168(k), now permanent for property placed in service after January 19, 2025. That means you front-load a big chunk of the write-off into year one instead of spreading it over 27.5 or 39 years.

The property
Rough estimate. A real study is done by an engineer and a CPA.
$

As a % of price. Land does not depreciate. 15% to 25% is typical.

As a % of building basis. Studies commonly find 20% to 35% on residential, more on some commercial.

Federal plus state combined, as a %. Use the Effective Rate tool if unsure.

Estimated year-one tax savings with cost seg
$0
The cash you keep in year one by accelerating depreciation.
Depreciable building basis$0
Year-1 depreciation, no cost seg$0
Year-1 depreciation, with cost seg + bonus$0
Extra first-year deduction$0
Tax saved on the extra deduction$0

This is a deferral and an offset, not free money, and depreciation is recaptured when you sell. But used with a 1031 exchange, REPS, or the short-term rental rules, that year-one loss can shelter your other income. The strategy lives in the details. Let's run yours.

%Effective Tax Rate EstimatorFind your marginal rate to plug in above. QQuarterly Tax PlannerPlan payments around your real estate losses.

Real estate is the best
tax shelter in the code.

Cost seg, bonus depreciation, REPS, the STR loophole, and 1031. Most investors use one of these. I stack them.

Book a Free Strategy Call
30 MIN · FREE · NO PITCH

Educational estimate only, not tax advice. Assumes qualified property placed in service after January 19, 2025, eligible for 100% bonus depreciation under §168(k). Straight-line "no cost seg" figure shown as a full-year amount for comparison and ignores the mid-month and mid-quarter conventions and any §163(j) interest limits. Depreciation is subject to recapture at sale. Passive activity loss rules under §469 may limit how the loss can be used. A real cost segregation study requires an engineering analysis. Your results will differ.