Accelerated depreciation,
quantified for your property
A cost segregation study reclassifies building components into short-life depreciation categories, accelerating tax deductions into the early years of ownership. This calculator estimates the year-one cash tax impact for your property and bracket. The acceleration isn't free money, it's the same depreciation, sooner, but for an investor in active-acquisition mode, the cash benefit is real.
Your inputs
Your property and bracket
Year-one impact
Accelerated depreciation, cashed out
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Approximate year-one accelerated depreciation deduction
Enter your property details to see the calculation.
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Approximate year-one cash tax savings
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Versus standard 27.5- or 39-year straight-line depreciation
The deduction isn't extra depreciation, it's the same total depreciation, taken sooner. The cash benefit is real but creates a depreciation-recapture obligation at sale (taxed at 25% federal). Cost segregation works best for investors who plan to hold long-term or 1031 into the next property.
The strategy MicroTax actually applies
Cost segregation works best inside a portfolio strategy
The single-property calculation above tells you the tax-savings potential. The portfolio-level question, which is the actual question, is whether to deploy cost-segregation studies in this year, on which properties, against what other income, and with what exit-planning implications.
A real estate professional with multiple properties and Real Estate Professional Status (REPS) qualification has different optimization than an investor with portfolio income subject to passive-loss rules. A short-term rental qualifies under different rules than a long-term residential. A property planned for 1031 sale has different recapture considerations than one held to estate-step-up.
MicroTax engagements for real estate investors include portfolio-level cost-segregation timing strategy, REPS-qualification analysis, and coordination with the broader tax position. See the real estate investors advisory page for the broader context.
Assumptions in this calculation
- 2026 federal bonus depreciation rate of 40% (phasing down from 100% in 2022; subject to law changes).
- Typical reclassification percentages by property type (industry estimates). Real engineering studies produce property-specific numbers, sometimes meaningfully different.
- Land is excluded from depreciable basis. Land/building split varies by property; use building portion only.
- Standard depreciation schedules: 27.5 years for residential, 39 years for commercial.
- Excludes state-level conformity issues (some states don't conform to federal bonus depreciation).
- Excludes depreciation recapture liability at sale (25% federal recapture on §1250 property).
- Engineering-based cost segregation studies cost $5,000-$20,000 to perform; that cost is not netted from the savings shown above.
This is illustrative, not advice. The figures above are estimates based on simplified federal assumptions. They do not constitute tax advice, financial advice, or a guaranteed projection of outcomes. Personal tax situations involve state taxes, NIIT, AMT, phase-outs, specific deductions, and many other factors not modeled here. Before making any tax-driven financial decision, consult a qualified tax advisor.
A calculator estimates. An advisor delivers
A single-property estimate misses the portfolio-level question: which properties, in which year, against what other income, with what exit-planning implications. We work through those questions in 30-minute strategy sessions.