Cost Segregation Savings Calculator: Estimate Your First-Year Tax Deduction

What the calculator estimates (and what it does not)

The calculator estimates the first-year deduction you would expect from a cost segregation study, using midpoint component allocations from our property type pages. Actual results depend on property-specific data that only an engineering walkthrough can capture: condition, age, recent improvements, and the share of fixtures owned versus tenant-installed.

The assumptions baked in

• Component allocations from IRS Publication 5653 industry guidance. Per-property-type ranges live on our property type pages.
• Bonus depreciation rate determined by acquisition date and placed-in-service date, following Public Law 119-21 (OBBBA) and IRS Notice 2026-11.
• MACRS first-year conventions: 20% for 5-year property, 5% for 15-year land improvements, half-year convention for real property.
• Default land value is 20% of purchase price when not provided.

Why an engineered study is more precise

A Fully Engineered study reviews actual cost records, blueprints, and a site inspection to allocate components. The IRS Cost Segregation Audit Techniques Guide identifies six methodologies in Chapter 3, and the detailed engineering approach from actual cost records is the most defensible.

Frequently asked questions

How does the cost segregation savings calculator estimate my deduction?

The calculator multiplies depreciable basis by the industry-typical reclassification percentage for the selected property type (20% to 40%), applies the OBBBA bonus depreciation rate determined by acquisition and placed-in-service dates, and multiplies by the combined federal and state marginal rate. Land defaults to 20% of purchase price when not provided.

What reclassification percentage should I expect for my property type?

Residential single-family rentals reclassify 20% to 25% of depreciable basis. Multifamily and short-term rentals reclassify 25% to 30%. Retail, office, and industrial properties reclassify 20% to 30%. Restaurants, hotels, and medical facilities reclassify 30% to 40%. The savings calculator uses the midpoint from IRS Publication 5653 industry guidance for each property type.

How is my marginal tax rate used in the calculation?

The calculator multiplies the first-year deduction by the combined federal and state marginal rate to project cash tax savings. Federal brackets are 10%, 12%, 22%, 24%, 32%, 35%, and 37% for 2025 filers. Adding a 5% to 12% state rate for non-conforming states produces combined rates from 27% to 49% for the deduction times rate calculation.

Why does the acquisition date matter for the calculator?

OBBBA (Public Law 119-21) permanently restored 100% bonus depreciation for property acquired and placed in service after January 19, 2025. Property under a binding contract before that date stays on the phase-down: 40% in 2025, 20% in 2026, and 0% thereafter. The calculator reads both dates and applies the correct rate from IRS Notice 2026-11.

Does the calculator account for state conformity to bonus depreciation?

The combined marginal rate input handles this at the state level. About a dozen states fully decouple from federal Section 168(k), including California, Florida (corporate), and New Jersey. Enter your effective state rate for the state portion of the calculation; the federal portion of the deduction remains at the OBBBA-determined bonus rate regardless.

How accurate is the calculator versus a real engineered study?

The calculator produces an estimate within 10% to 20% of a Fully Engineered study result for typical properties. Actual reclassification depends on property-specific factors an engineering walkthrough captures: condition, age, recent improvements, and the share of fixtures owned versus tenant-installed. The free preliminary analysis returns an engineer-reviewed estimate within four business hours.

Does the estimated deduction always translate to cash tax savings?

Only when the loss is usable. Passive rental losses without REPS or STR loophole qualification suspend under IRC Section 469 and carry forward until offset by passive income or property sale. The calculator shows the deduction; whether it saves cash this year depends on the passive activity rules and whether the taxpayer has passive income to absorb.