Estimate tax savings from cost segregation by reclassifying components of a property into shorter depreciable lives (5/7/15 years) versus 27.5/39 years. Enter purchase price, land allocation, and eligible percentages to project bonus depreciation, Year‑1 deduction, and multi‑year NPV benefits. Includes caution on study requirements and audit risk.
Frequently Asked Questions
Who should consider cost segregation?
Owners of income‑producing real estate with significant improvements and substantial taxable income, especially in early ownership years.
Do I need a formal study?
Best practice is an engineering‑based study for accuracy and audit defense; small projects may use a quality estimate with documentation.
How does bonus depreciation work in 2025?
Bonus rates phase down versus prior years; the tool models first‑year acceleration based on current law.
Check updates before filing.
What about recapture on sale?
Depreciation may be recaptured at ordinary rates on disposition.
Model hold periods and exit scenarios with your advisor.
Can primary residences qualify?
No.
Cost segregation applies to property used in a trade or business or for the production of income.
Land value treatment?
Land is non‑depreciable.
Allocate land fairly from total purchase to avoid overstating depreciation.
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- Author: SuperCalc Editorial Team
- Reviewed: SuperCalc Editors (clarity & accuracy)
- Last updated: 2026-01-13
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Financial/Tax Disclaimer
This tool does not provide financial, investment, or tax advice. Calculations are estimates and may not reflect your specific situation. Consider consulting a licensed professional before making decisions.