Cost Segregation Calculator
Cost segregation is a tax strategy that accelerates depreciation deductions on commercial and residential rental properties. Instead of depreciating the entire building over 27.5 or 39 years, a cost seg study reclassifies certain components (electrical, plumbing, fixtures, land improvements) into 5-year, 7-year, and 15-year categories. Combined with bonus depreciation, this can generate massive year-1 tax deductions. Enter your property details to see estimated savings.
Inputs
Land is not depreciable. Only applies to purchases.
Federal + state income tax rate
Results
Year-1 Tax Savings (With Cost Seg)
$39,066
Year-1 Savings (Without)
$10,182
Additional Year-1 Savings
$28,884
3.6% of basis
5-Year NPV of Savings
$101,932
Reclassification Breakdown
Year-1 Tax Savings Comparison
5-Year Depreciation by Asset Class
Asset Reclassification Breakdown
5-Year Depreciation Schedule (With Cost Seg)
| Year | 5-Year | 7-Year | 15-Year | 27.5-Year | Total | Tax Savings | Cumulative |
|---|---|---|---|---|---|---|---|
| 1 | $57,600.00 | $16,344.64 | $19,200.00 | $18,472.73 | $111,617.37 | $39,066.08 | $39,066.08 |
| 2 | $40,960.00 | $10,187.84 | $6,080.00 | $18,472.73 | $75,700.57 | $26,495.20 | $65,561.28 |
| 3 | $24,576.00 | $7,275.84 | $5,472.00 | $18,472.73 | $55,796.57 | $19,528.80 | $85,090.08 |
| 4 | $14,745.60 | $5,195.84 | $4,928.00 | $18,472.73 | $43,342.17 | $15,169.76 | $100,259.83 |
| 5 | $14,745.60 | $3,714.88 | $4,435.20 | $18,472.73 | $41,368.41 | $14,478.94 | $114,738.78 |
Asset Class Detail
| Asset Class | Amount | % of Basis | Year-1 Depreciation | Year-1 Tax Savings |
|---|---|---|---|---|
| 5-Year Property | $160,000.00 | 20.00% | $57,600.00 | $20,160.00 |
| 7-Year Property | $52,000.00 | 6.50% | $16,344.64 | $5,720.62 |
| 15-Year Property | $80,000.00 | 10.00% | $19,200.00 | $6,720.00 |
| 27.5-Year Property | $508,000.00 | 63.50% | $18,472.73 | $6,465.45 |
Depreciable Basis: $800,000 ($1,000,000 purchase price - $200,000 land value) · Bonus Depreciation: 20% · Tax Rate: 35%
Estimates based on industry benchmark reclassification rates. An actual engineering-based cost segregation study will provide exact figures for your property.
Frequently Asked Questions
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