Large Apartment Complex Cost Segregation
The three positions our estimate uses for this property type, the components a study itemizes in the shorter lives, and an illustrative example from our estimate engine.
Conservative
20%
of building basis excluding land
Middle of the Road
28%
of building basis excluding land
Aggressive
38%
of building basis excluding land
The shares our estimate uses for this property type. What the three positions mean
Expected reclassification range 17% to 30%, midpoint 23%
The comparative band for every property type is SmartCostSeg house judgment used to gauge an allocation against the type's own Conservative, Middle of the Road and Aggressive positions; it is not an IRS threshold, an industry percentile or a published median.
The Conservative, Middle of the Road and Aggressive percentages for Large Apartment Complex are transcribed verbatim from the Expectation Guide row "Large Apartment Complex"; they are planning priors, not a substitute for documentation.
An Illustrative Example
Illustrative example computed by our estimate engine: purchase price $2,000,000, land $300,000 at the engine's default share of the price, acquired and placed in service January 1, 2026, so the engine applies a 100% bonus rate. The price and the land share are inputs for this example, not figures for this property type. Results vary with property specifics and your tax situation.
The estimate keeps the building on its 27.5 year life.
Building basis $1,700,000. First year depreciation without a study $61,818.
| Measure | Conservative | Middle of the Road | Aggressive |
|---|---|---|---|
| Share of the building basis moved | 20% | 28% | 38% |
| Moved to shorter lives | $340,000 | $476,000 | $646,000 |
| First year depreciation with a study | $389,455 | $520,509 | $684,327 |
| Additional first year deduction | $327,637 | $458,691 | $622,509 |
The Middle of the Road position, by class
- Modeled in the 5 year class$333,200
- Modeled in the 15 year class$142,800
- Building on its 27.5 year life$1,224,000
First year federal tax savings at each bracket, Middle of the Road
- At the 24% federal bracket: $110,086
- At the 32% federal bracket: $146,781
- At the 35% federal bracket: $160,542
- At the 37% federal bracket: $169,716
Federal income tax only. Your CPA confirms your bracket and any state effect.
These savings assume the full deduction can be used this year. Whether it can depends on your tax situation, including the passive activity rules, and your CPA decides. What a passive activity is
What Usually Moves to Shorter Lives
The components a study itemizes in the shorter lives for this kind of building, and confirms on your property. The example above splits by class only.
Itemized in the 5 year class
- Carpet, vinyl and other removable floor coverings
- Kitchen and laundry appliances
- Decorative and accent lighting fixtures
- Electrical branch circuits and outlets dedicated to equipment
- Plumbing connections dedicated to equipment and appliances
- Window treatments (blinds, drapes and hardware)
- Low-voltage security, access-control and data cabling
- Miscellaneous removable finishes and accessories
Itemized in the 15 year class
- Parking lot paving, curbs and striping
- Sidewalks and exterior hardscape
- Landscaping, shrubbery and planting beds
- Site drainage, storm structures and retention
- Fencing, gates and retaining walls
- Site and parking-lot lighting (poles, bases, circuits)
- Swimming pool, spa and pool equipment
What moves your number
- Stories
- Clubhouse/pool
- Parking acreage
- For residential rentals the IRS says appliances, carpeting and furniture are 5 year property, and roads, fences and shrubbery (if depreciable) are 15 year property. Source: IRS Publication 527 (2025), chapter 2, Property Classes Under GDS
See It in a Sample Study
§1031 Replacement (Default Rule)
A 1031 exchange study for this property type.
The sample study has its own price, land value and dates, and the full study engine builds it, so its figures differ from the example above.
§1031 Replacement (Election Out)
A 1031 exchange study for this property type.
The sample study has its own price, land value and dates, and the full study engine builds it, so its figures differ from the example above.
Start With Your Own Property
The wizard asks the questions for this property type and routes it to the right lane.