Cost Segregation Calculator

Enter a price, a land share and a property type to see an estimate at the Conservative, Middle of the Road and Aggressive positions. Estimates are ranges, never guarantees.

Your Estimate

Purchase PriceEstimated Land Value: 15% of priceLess to land means more to depreciate, so a low land value is the aggressive land position.Property Type

Scenario

Combined Tax Rate: 32%

Estimated First-Year Tax Savings

$53,470

Additional Year-1 deduction $167,094

This quick estimate assumes a 100 percent bonus rate. Which rate applies depends on your acquisition and placed in service dates, which our bonus depreciation guide sets out with its sources; the wizard uses your real dates.

Building Basis

$722,500

Reclassified (5/15-yr)

$173,400

Your depreciation in year one

Without a study: $26,273 in year one

With a study: $193,367 in year one

Your first year tax savings at each federal bracket

24%

$40,103

32%

$53,470

35%

$58,483

37%

$61,825

Federal income tax only. Your CPA confirms your bracket and any state effect.

Audit-risk gauge: green. Green on SmartCostSeg's comparative band for this property type.

Estimates are ranges, never guarantees. Actual benefits depend on your specific tax situation. We do not prepare tax returns or provide legal advice; please consult your CPA, tax preparer, or attorney regarding implementation.

The figures above are illustrative, computed by our estimate engine for the inputs shown. 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 the Estimate Rests On

The three positions describe the building only. Land is carved out first and never depreciates, so the less of the price assigned to land, the more there is to depreciate: a low land value is the aggressive land position and a high land value is the conservative one.

Land cannot be depreciated. The costs of clearing, grading, planting and landscaping are usually part of the cost of land. Source: Treas. Reg. section 1.167(a)-2; IRS Publication 527 (2025), chapter 2, What Rental Property Can't Be Depreciated
Under the general depreciation system, residential rental property is depreciated over 27.5 years and nonresidential real property over 39 years. The alternative depreciation system, which applies to some property, has longer recovery periods. Source: IRC section 168(c) and (g)(2)(C); IRS Publication 946 (2025), chapter 4
Bonus depreciation can apply to property that has a recovery period of 20 years or less, as long as the property also meets the other tests, such as the original use or used property rule. That covers the 5 year, 7 year and 15 year components a cost segregation study identifies. It does not cover the 27.5 year or 39 year building itself. Source: IRC section 168(k)(2)(A)(i)(I)
The 100 percent rate applies only to property acquired after January 19, 2025. Property acquired on or before that date stays under the prior phase down rules. Source: P.L. 119-21 section 70301(c)(1), 139 Stat. 190 (26 U.S.C. 168 note)
A passive activity is a trade or business in which the taxpayer does not materially participate, and it includes any rental activity except as provided for real estate professionals. An activity that falls outside the rental definition is tested under the material participation rules instead. Source: IRC section 469(c)(1) and (c)(2)

The rules on this page were checked against their sources on October 1, 2026.

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