Cost Segregation Calculator
Estimate the benefit before you pay for a study.
Enter what the property cost and when it went into service. This cost segregation calculator shows you three things:
- The extra depreciation a study could move into the modeled tax year.
- What that could save in federal tax.
- What's left after you pay for the study.
It's free. No name, no email, no address. Your numbers stay in your browser.
By CostSegregationMatch. Tax rules checked October 6, 2026.
Already have your numbers and just want to compare studies?
Cost segregation calculator
Example numbers
First-year scenario for 2026
Building basis $600,000. 20% reclassified (an assumption). Bonus rate 100%.
Swipe or scroll tables sideways to see all columns.
| Line | Without a study | With a study |
|---|---|---|
| 2026 depreciation | $10,000 | $128,000 |
| Extra deduction | $118,000 | |
| Federal tax effect if you can use all of it (32%) | $37,760 | |
| Study and extra tax-preparation fees | -$3,500 | |
| After fees, if you can use all of it | $34,260 | |
| After fees, if you can use none this year | -$3,500 |
We do not know yet if you can use this deduction in 2026. If you can use all of it, you come out $34,260 after fees. If you can use none of it this year, you are out $3,500 in fees for now. Ask your tax preparer which is closer.
To cover $3,500 in fees at 32%, you need $10,937.50 of extra deduction you can use.
Same property, three reclassified shares
| Share | Extra deduction | Tax effect if all usable | After fees if all usable |
|---|---|---|---|
| 10% | $59,000 | $18,880 | $15,380 |
| 20% (selected) | $118,000 | $37,760 | $34,260 |
| 30% | $177,000 | $56,640 | $53,140 |
These shares are what-if numbers. They are not averages or predictions for your building.
- Assuming eligible property acquired and placed in service after January 19, 2025: 100%. A signing date alone does not establish the tax acquisition date; elections and other restrictions can change the rate. It applies only to parts of the building that qualify.
- This compares timing. It is not lifetime savings, and it does not include state tax or tax when you sell.
Ready to compare studies and prices? Find My Cost Seg Provider
Show the calculation
- Building basis: $600,000. Building life: 27.5 years. In service: July 2026.
- Reclassified: $600,000 × 20% = $120,000.
- Without a study: $600,000 × 5.5 months ÷ 330 months = $10,000.00.
- Short-life items in year one (bonus 100%, then regular depreciation on the rest): $120,000.00.
- Rest of the building: $480,000 × 5.5 ÷ 330 = $8,000.00.
- Extra deduction: $128,000.00 − $10,000.00 = $118,000.00.
- Tax effect if all usable: $118,000.00 × 32% = $37,760.00.
Ten years, with and without
| Tax year | Without a study | With a study | Difference |
|---|---|---|---|
| 2026 | $10,000 | $128,000 | $118,000 |
| 2027 | $21,818 | $17,455 | -$4,364 |
| 2028 | $21,818 | $17,455 | -$4,364 |
| 2029 | $21,818 | $17,455 | -$4,364 |
| 2030 | $21,818 | $17,455 | -$4,364 |
| 2031 | $21,818 | $17,455 | -$4,364 |
| 2032 | $21,818 | $17,455 | -$4,364 |
| 2033 | $21,818 | $17,455 | -$4,364 |
| 2034 | $21,818 | $17,455 | -$4,364 |
| 2035 | $21,818 | $17,455 | -$4,364 |
Deductions brought forward leave less to deduct over the remaining years. With partial or no bonus, some later years can still be higher. The table shows the timing, not lifetime savings.
See the summary text
Educational estimate. Not a cost segregation study and not tax advice. Tax rules checked October 6, 2026.
This is an estimate for planning. It is not a cost segregation study, and it is not tax advice.
How to read your result
This cost segregation benefit calculator splits the benefit into three numbers. They are not the same thing.
Extra deduction. Depreciation is the yearly tax write-off for the cost of income-producing property. Under the standard GDS rules modeled here, residential rental buildings are written off over 27.5 years and most nonresidential buildings over 39 years. A cost segregation study identifies qualifying components, such as some flooring, cabinets, and parking improvements, that can be written off over shorter periods. The extra deduction is how much write-off moves into the year shown in your result. (IRS Publication 946)
Tax effect if you can use all of it. This is the extra deduction times your tax rate. That is the figure before fees.
After fees. This is the tax effect minus the study fee and any extra tax-prep fee you entered.
If either fee is blank, it stays unknown. Enter both before using the after-fee result; enter $0 only when the fee is really zero. A historical first-year view does not subtract today's fees from an older year's deduction.
One warning. A deduction only saves tax if you can use it. Many rental owners can't use all of it right away. Step 3 of the calculator handles that. Here is how it works.
Worked example: a $750,000 rental
Here is the example the calculator loads with. Every number is made up for teaching. None of them is an average or a quote.
You buy a rental for $750,000. The land is worth $150,000, so the building is $600,000. The tax rules treat you as acquiring it in February 2026. It's ready to rent in July 2026. We assume the reclassified components qualify for 100% bonus depreciation. Your federal tax rate is 32%. The study costs $3,000 and your tax preparer charges $500 more to use it.
Say a study moves 20% of the building into short-life property.
| Step | Amount |
|---|---|
| Total cost | $750,000 |
| Minus land | −$150,000 |
| Building basis | $600,000 |
| Depreciation with no study (July, so 5.5 months of 330) | $10,000 |
| 20% reclassified: $600,000 × 20% | $120,000 |
| Deducted in year one at 100% bonus | $120,000 |
| Rest of the building: $480,000 × 5.5 ÷ 330 | $8,000 |
| Total with a study | $128,000 |
| Extra deduction: $128,000 − $10,000 | $118,000 |
| Tax effect at 32%, if you can use all of it | $37,760 |
| Minus fees: $3,000 + $500 | −$3,500 |
| After fees, if you can use all of it | $34,260 |
Why 5.5 months? The IRS treats a building as placed in service in the middle of its first month. July through December is 5.5 months. (IRS Publication 946)
A property-specific analysis has to support the real share. So look at three:
| Share reclassified | Extra deduction | Tax effect at 32%, if all usable | After $3,500 in fees, if all usable |
|---|---|---|---|
| 10% | $59,000 | $18,880 | $15,380 |
| 20% | $118,000 | $37,760 | $34,260 |
| 30% | $177,000 | $56,640 | $53,140 |
Those are what-if numbers. They are not "low, likely, high."
Can you use the deduction this year?
This is the question that decides whether the number is real for you.
By default, a loss from a rental is a passive loss. A passive loss generally offsets passive income, such as profit from other rentals, rather than your paycheck. Losses suspended under the passive-activity rules generally carry forward. Exceptions and other limits can change what you can use. (IRS Publication 925)
There are three common ways around that limit.
| Your situation | What you can generally use this year |
|---|---|
| You're a real estate professional. More than half of all your personal services in trades or businesses, and more than 750 hours, are in qualifying real-property trades or businesses in which you materially participate. You also materially participate in the rental activity. | The rental loss can be nonpassive and offset other income, including wages, subject to other tax limits. |
| It's a short-term rental with an average stay of 7 days or less, and you materially take part in running it. | It isn't treated as a rental activity under these rules. The loss can be non-passive. |
| You actively participate through meaningful management decisions, and you and your spouse together own at least 10% by value throughout the year. Your filing status and modified adjusted gross income also qualify. | Available passive income, plus any remaining special allowance. See the table below. |
| None of the above. | Generally, available passive income. Losses suspended under the passive-activity rules carry forward. |
For the real estate professional tests, employee hours generally do not count unless you own more than 5% of the employer. Spouses cannot combine their hours to meet the two professional-status tests, although a spouse's participation can count when testing participation in an activity. (IRS Publication 925)
For eligible individuals other than married people filing separately, the $25,000 allowance shrinks as income goes up. It drops by $1 for every $2 of modified adjusted gross income over $100,000.
| Modified adjusted gross income | Allowance |
|---|---|
| $100,000 or less | $25,000 |
| $120,000 | $15,000 |
| $140,000 | $5,000 |
| $150,000 or more | $0 |
If you are married filing separately and lived apart all year, the maximum is $12,500 and it phases out between $50,000 and $75,000 of modified adjusted gross income. If you lived together at any point in the year, there is no special allowance. (IRS Instructions for Form 8582)
Other rental losses and prior carryovers may already use that income or allowance. Basis, at-risk, and excess-business-loss rules can also limit use. An allowance calculation is not the amount of this extra deduction you can automatically claim.
Modified adjusted gross income here is the rental-loss calculation in the tax rules, not simply your salary or total household income.
Now look at what that does to the example. Same building. Same study. Same $118,000 extra deduction.
| What you can use in 2026 | Tax effect at 32% | After $3,500 in fees |
|---|---|---|
| All $118,000 | $37,760 | $34,260 |
| $20,000 | $6,400 | $2,900 |
| $4,000 confirmed by your preparer as available for this extra deduction, after ordinary depreciation and other losses | $1,280 | −$2,220 |
| $0 | $0 | −$3,500 |
The gap between the top row and the bottom row is $37,760. That's why this question comes before "which provider."
The calculator lets you model full use, a usable-dollar cap, no current use, or uncertainty. Its optional allowance helper estimates the maximum special allowance from the facts you enter; it does not turn that amount into your usable deduction. Rules like "material participation" turn on your facts, and that's a call for your tax preparer.
Is a cost segregation study worth the fee?
Think of this part as a cost segregation study calculator. It shows what the deduction would need to cover the fees under your assumptions.
Here's the test. Divide the total fees by your tax rate. That's how much usable extra deduction you need just to cover the cost in the modeled year, at a constant tax rate. With a 0% rate there is no modeled current-year tax benefit to cover positive fees.
In the example: $3,500 ÷ 0.32 = $10,937.50.
| Your federal rate | Usable extra deduction needed to cover $3,500 |
|---|---|
| 22% | $15,909 |
| 24% | $14,583 |
| 32% | $10,938 |
| 35% | $10,000 |
| 37% | $9,459 |
At that tax rate, a usable extra deduction above the line covers the entered fees in that year. Below the line, it does not cover them that year. Later use of suspended passive losses may still have value; this fee test does not calculate that value or the taxes due when you sell.
No quote yet? Here is what two companies publish. These are starting prices and examples, not quotes for your property. We checked them on October 6, 2026.
- CostSegregation.com, from KBKG, is self-guided software. Its home page shows a $495 residential example at $750,000 of tax basis, excluding land. Eligibility and price depend on your property. Its home page says "up to" $1.5 million in basis, while its FAQ says "under" that amount. Confirm the limit if you are near it.
- R.E. Cost Seg publishes Rapid Reports from $950 for eligible smaller residential properties. Fully Engineered Studies start at $2,320 for residential and $2,730 for commercial. Confirm your property's scope and final fee in the proposal.
The study fee is not the whole cost. Ask each provider:
- What does the report cost for my property?
- Is Form 3115 or other tax-prep work extra? Who does it?
- What does "audit support" cover, and where does it stop?
- Is an inspection included, or does it cost more?
A smaller property. A $300,000 rental with $60,000 of land has a $240,000 building. Under the example's other assumptions, with 20% reclassified, the extra deduction is $47,200. At a 24% rate that's $11,328, if you can use it. If the study and extra tax work total $2,500, that leaves $8,828 this year. That fee is made up for this example; use your actual quote. If none of the deduction is usable now, there is no current-year tax benefit to cover those fees.
Our comparison page shows what each study includes, who it fits, and what to confirm before you pay.
Which bonus depreciation rate applies to your property?
Bonus depreciation lets you deduct some or all of an eligible short-life item's cost in its first year. The rate depends on when the tax rules treat you as acquiring the property, and when it was ready and available for use.
Eligible property acquired and placed in service after January 19, 2025 can qualify for 100% bonus. Earlier acquisitions may remain on the phase-down rates. (IRS Publication 946; IRS Notice 2026-11)
| Acquired under the tax rules | Placed in service | Conditional bonus rate |
|---|---|---|
| After January 19, 2025 | After January 19, 2025, including 2026 | 100% |
| After September 27, 2017 and before January 20, 2025 | 2026 | 20% |
| After September 27, 2017 and before January 20, 2025 | 2025 | 40% |
| After September 27, 2017 | 2024 | 60% |
| After September 27, 2017 | 2023 | 80% |
| After September 27, 2017 | 2018 to 2022 | 100% |
The table assumes eligible ordinary components, no election out of bonus, and none of the special rules excluded from this calculator. Property placed in service January 1–19, 2025 does not receive the restored 100% rate merely because it was used during 2025. A limited transition election can also change the rate for the first taxable year ending after January 19, 2025. Your preparer should confirm any election. (IRS Notice 2026-11)
Three things people get wrong:
- A signature alone does not settle the date. For a written binding contract, the acquisition date is generally the latest of signing, enforceability under state law, the end of cancellation periods, and satisfaction of relevant contingencies. A January 15 signing can remain on the old rates if that is also the tax acquisition date; a March closing alone does not settle it.
- Ordering a study now doesn't reset the dates. A property put in service in 2024 still uses its original-year acquisition and bonus rules, including a 60% rate where the conditions are met.
- 100% doesn't mean the whole building in this model. It applies to eligible reclassified 5-, 7-, or 15-year components, not the remaining ordinary building basis. Separate rules for qualified production property are outside this calculator. (IRS Notice 2026-16)
The rate changes the answer a lot. Here is the same example at each rate. For the part not covered by bonus, we split it evenly between 5-year and 15-year items and use the half-year convention. These are comparisons, not rates you can freely choose for a tax return.
| Bonus rate | Extra deduction | Tax effect at 32%, if all usable | After $3,500 in fees, if all usable |
|---|---|---|---|
| 100% | $118,000 | $37,760 | $34,260 |
| 80% | $97,000 | $31,040 | $27,540 |
| 60% | $76,000 | $24,320 | $20,820 |
| 40% | $55,000 | $17,600 | $14,100 |
| 20% | $34,000 | $10,880 | $7,380 |
| 0% | $13,000 | $4,160 | $660 |
Look at the last row. Even with no bonus, a study still moves some deduction forward. It's just much smaller.
What moves the number most
Not every input matters the same. Here is the example with one thing changed at a time.
| Change | Extra deduction | Why it matters |
|---|---|---|
| The example as is | $118,000 | |
| Share reclassified: 10% instead of 20% | $59,000 | The biggest unknown |
| Bonus rate: 20% instead of 100% | $34,000 | Depends on dates, eligibility, and elections |
| Land: $250,000 instead of $150,000 | $98,333 | More land means less building |
| Commercial (39 years) instead of residential | $118,590 | Small effect |
| January instead of July | $115,818 | Small effect |
And for the tax effect: at 24% the $118,000 is worth $28,320. At 37% it's worth $43,660.
The share reclassified
This is the number a property-specific analysis has to support. So we don't guess it for you. We show 10%, 20%, and 30%, and you can type your own.
For context, here is what two providers publish. These are their own claims, not independent data.
| Property type | Share R.E. Cost Seg says is typical |
|---|---|
| Single-family rental | 20–30% |
| Multifamily and apartments | 25–30% |
| Short-term rentals | 25–30% |
| Office | 25–30% |
| Warehouse and industrial | 25–30% |
| Restaurants | 30–40% |
| Self-storage | 30–40% |
Source: R.E. Cost Seg, checked October 6, 2026. Its own worked example on that page moves $174,000 of a $510,000 building, which is 34%.
CostSegregation.com shows three examples on its home page with first-year deductions equal to about 18% to 23% of building cost. Those are total first-year deductions, not the share reclassified, so they are not directly comparable with the ranges above. Checked October 6, 2026.
Ask any provider to show which assets produce its estimate and how it calculated the extra deduction. A provider's typical range is not a limit for every property.
Land
Land itself is not depreciable. Buildings and qualifying improvements, including some land improvements, are. So you have to separate the land from the depreciable costs.
If you are not certain of the land and building's fair market values, the IRS says you can use their assessed values for real estate tax purposes to allocate the cost. An assessment is not automatically the best evidence when better information is available. (IRS Publication 527)
Example: if the assessment is the appropriate allocation evidence and shows land at 20% of the total, a $750,000 cost allocates $150,000 to land.
Don't use a universal rule of thumb. The right allocation depends on the property and the evidence.
Basis is not price, equity, or today's value
Start with what you paid, plus closing costs that get added to basis. Don't use your loan balance, your down payment, or what the property is worth now.
Using a loan does not remove the financed part of an eligible acquisition cost from basis. If your preparer has already given you building basis excluding land, use that input option and do not subtract land again. (IRS Publication 527)
If you already bought furniture or equipment and depreciate it on its own, leave it out. Otherwise it gets counted twice.
Building type and short-term rentals
Under the standard GDS rules modeled here, residential rental buildings use 27.5 years and nonresidential real property generally uses 39 years.
A short-term rental doesn't always count as residential rental property for this purpose. The 7-day passive-loss rule does not decide the building's recovery period. The residential definition generally requires at least 80% of gross rental income to come from dwelling units; it excludes hotels, motels, and other establishments where more than half the units are used on a transient basis. The calculator won't pick for you. Compare both as what-if cases, and ask your preparer which life applies. (IRS Publication 946)
Your tax rate
Use your marginal rate. That's the rate on your last dollar of income. For 2026:
| Rate | Single, taxable income over | Married filing jointly, over |
|---|---|---|
| 10% | $0 | $0 |
| 12% | $12,400 | $24,800 |
| 22% | $50,400 | $100,800 |
| 24% | $105,700 | $211,400 |
| 32% | $201,775 | $403,550 |
| 35% | $256,225 | $512,450 |
| 37% | $640,600 | $768,700 |
Source: IRS, tax year 2026 inflation adjustments.
A big deduction can drop part of your income into a lower bracket. The calculator uses one rate for all of it, so a large deduction may be worth less than shown.
Already own the property? The catch-up
You don't have to do a study in the year you buy. A later study may reveal depreciation you can catch up on.
Here's the idea. Your preparer reconciles two totals for the same property and the years before the change:
- the depreciation you did take under the existing method, and
- the depreciation allowable under the corrected treatment, using supported asset classifications, original-year rules, and applicable elections.
The difference may produce a Section 481(a) catch-up adjustment. A negative adjustment is generally deducted in the change year through an appropriate accounting-method change, often using Form 3115. Other corrections may need a different route, including an amended return. Your preparer picks the right filing route for your case. (IRS Publication 946, "How Do You Correct Depreciation Deductions?")
Simple version. You took $40,000. Your preparer establishes that $120,000 was allowable under the corrected treatment. The signed adjustment is $40,000 − $120,000 = −$80,000. That corresponds to a potential $80,000 catch-up deduction if the requirements are met.
In the calculator. Pick the year the property went into service. For an earlier service year, you can model a catch-up for 2026 after confirming the model's assumption: the same eligible basis has stayed on the original building's straight-line schedule since it went into service, without an earlier study, separately depreciated components left in the basis, or other changes that need a different calculation.
That confirmation is an assumption for the model, not CPA approval or proof of what you actually deducted. The calculator constructs two hypothetical schedules. It uses the original acquisition and service-year bonus rules, not today's rate. Your preparer must reconcile actual prior depreciation, eligible assets, elections, and the filing requirements before using a catch-up amount.
If you choose a historical first-year view instead, it describes that original year's deductions. It does not subtract today's study fees or show a fee break-even amount for a study ordered now.
Take the same $750,000 rental and the same 20% share, but acquired under the applicable qualifying rules and placed in service in July 2023. Assume eligible 80% bonus, no election out, and the same half-year, 50/50 split between 5- and 15-year items.
| Line | Amount |
|---|---|
| Modeled depreciation through 2025 with the reclassification | $150,219 |
| Modeled depreciation through 2025 on the original building schedule | $53,636 |
| Potential catch-up deduction under those assumptions | $96,583 |
| Modeled 2026 depreciation difference: with minus without | −$2,058 |
| Extra deduction modeled for 2026 | $94,525 |
| Tax effect at 32%, if all usable | $30,248 |
| After $3,500 in fees, if all usable | $26,748 |
Two cautions. These are model outputs, not a reconstruction of your filed returns or a determination that you can change methods. And a study report is not the same as Form 3115. Ask who prepares the form and what it costs.
The calculator covers the supported scenarios for service years 2018–2026. For older properties or facts outside this model, take your depreciation schedule to your preparer.
After year one, and when you sell
In this comparison, a study moves deductions earlier rather than creating more total basis to deduct. With 100% bonus, later years get smaller. With partial or no bonus, some later years can still be higher; the calculator's ten-year table shows the pattern for the assumptions you enter.
In the example:
| Tax year | Without a study | With a study |
|---|---|---|
| 2026 | $10,000 | $128,000 |
| 2027–2053, each full year | $21,818 | $17,455 |
| 2054, final half-month | $909 | $727 |
| 2055 onward, after recovery ends | $0 | $0 |
After year one, you get about $4,364 less in each full year shown. Over the full recovery period, the totals match at $600,000 under these assumptions, with no sale or other change. What you gain is time: a big deduction now instead of small ones for decades. The table rounds each amount to whole dollars.
When you sell, part of the benefit can come back.
- Gain attributable to straight-line depreciation on ordinary building property can be unrecaptured Section 1250 gain, taxed at up to 25% for individuals.
- Section 1245 assets, such as many equipment items, can produce ordinary-income recapture up to the lesser of depreciation allowed or allowable and the gain on those assets.
- Some 15-year real property falls under Section 1250 instead, where accelerated depreciation can have different recapture treatment. Your preparer must classify the assets and allocate the sale proceeds. (IRS Publication 544; IRS capital-gain guidance)
If you took a deduction at 32% and later paid 32% on the same dollars, the benefit on those dollars would be the time you had the money. How much is taxed at sale depends on the gain, asset classifications, depreciation history, and allocation of the sale price. The calculator does not estimate those amounts.
If you plan to sell in the next few years, ask your preparer to run the sale year too. Exchanges and estate plans can change the picture.
What this calculator leaves out
It's a first look. It does not include:
- State income tax. Some states don't follow the federal bonus rules. California's tax agency, for example, confirms that its personal income tax does not conform to federal bonus depreciation.
- Tax when you sell. See the section above.
- Bracket changes. It uses one tax rate for the whole deduction.
- Special cases. These need their own math: a property you got in a 1031 exchange, a gift, or an inheritance; personal or mixed use; a home you turned into a rental; a building you built yourself; major renovations with their own in-service dates; a property that already has a study; or complex ownership allocations.
- Other depreciation systems and elections. ADS, qualified improvement property, qualified production property, Section 179 interactions, and different elections or bonus eligibility by asset class are outside this model. A generic 15-year component here uses declining balance; qualified improvement property uses a different method.
- Other tax rules. The qualified business income deduction, the net investment income tax, and limits on very large business losses.
- Whether you qualify for any status you picked.
If one of these fits you, the numbers here can still frame the talk with your preparer. They just aren't your answer.
Next step: turn the estimate into a decision
You have two separate questions now.
Does the tax side work for me? That's for your tax preparer. Use the "Copy summary for my tax preparer" button in the calculator. It includes six questions to ask.
Which study fits my property? That's what we compare.
| Confirm this | With whom | The question |
|---|---|---|
| Basis and land | Preparer | Are these the right numbers, and is anything already depreciated on its own? |
| Bonus rate | Preparer | Which rate applies, given the tax acquisition rules, service date, and any elections? |
| Usable deduction | Preparer | How much extra deduction can I really use this year? |
| Study type | Provider | Is this software I fill in, a report from a questionnaire, or an engineered study with an inspection? |
| Total cost | Provider | What are the report fee, the tax-prep fee, and any extras? |
| Support | Provider | If the IRS asks about the study, what do you do, and what's left to my preparer? |
We compare a small set of published offers, not the whole market. The links on that page are labeled, and you can read how we make money and how we compare.
Common questions
How accurate is a cost segregation calculator?
The arithmetic follows the assumptions you enter. The unknowns include the share reclassified, eligible assets, tax dates, your existing depreciation, and how much you can use this year. This calculator does not inspect your property, so treat any single number with care. That's why it shows three shares side by side.
Can I use this estimate on my tax return?
No. Your return needs supported asset classifications, cost allocations, depreciation calculations, and the appropriate filings. These what-if percentages do not provide that support. The IRS guide for auditing cost segregation studies explains the documentation examiners look for. (IRS Publication 5653) Use this estimate to decide whether a study is worth pricing.
Is there a minimum property value?
The IRS does not set a universal minimum property price for this analysis. Some company calculators won't take a property under a set price, but that is their commercial limit. What matters for the fee comparison is whether your usable tax effect beats the total fees under the assumptions, along with future use and your plans for the property. Run your numbers and look at the "after fees" line. (IRS Publication 946)
Does a used building qualify for bonus depreciation?
It can. Eligible components of used property can qualify when the purchase meets the prior-depreciable-interest and related-party rules, along with the other acquisition requirements. Prior occupancy or use alone is not the test. Ask your preparer to confirm the facts. (IRS Publication 946; bonus depreciation regulations)
Can I do this on my own home?
For a home used only personally, no. A qualifying business or rental portion has separate rules this calculator does not model. If you turn a home into a rental later, special basis rules also apply. Ask your preparer. (IRS Publication 527)
Do you save what I type?
No. The math runs in your browser. We don't send, store, or track your numbers, and they aren't added to any link you click.
How this calculator works
For first-year property, in plain steps:
- Building basis = eligible acquisition basis − land − included assets already accounted for separately. Direct building basis already excludes those amounts.
- Reclassified amount = building basis × the share you chose.
- Without a study: building basis × first-year months under the mid-month convention ÷ total recovery months (330 for residential, 468 for nonresidential).
- With a study: the reclassified amount × the bonus rate, plus regular first-year depreciation on any part bonus didn't cover, plus the rest of the building figured as in step 3.
- Extra deduction = step 4 − step 3.
- Tax effect = the extra deduction you can use × your tax rate.
- After fees = tax effect − study fee − extra tax-prep fee.
For a prior-year property's modeled catch-up, the extra deduction in the change year is the potential catch-up deduction plus that year's depreciation with reclassification minus that year's depreciation without it. Both schedules use the assumptions you confirm; neither is an audit of your actual prior returns.
The modeled short-life items use 200% declining balance for 5- and 7-year items and 150% for 15-year items, switching to straight-line when appropriate. The half-year convention is an assumption unless you switch it. The mid-quarter test depends on relevant assets placed in service during the year, not just this property's month. We calculate rates by formula rather than copying the rounded IRS table entries, so table-based results can differ; the dollar difference depends on basis. (IRS Publication 946)
What we assume: one U.S. income property within the stated GDS scope, one in-service date, a full calendar tax year, no disposal during the years modeled, and federal tax only. QIP, ADS, qualified production property, and the other special cases listed above need different calculations. Fees are subtracted as cash when both amounts are known. We don't assume the fees are deductible, and today's fees are not subtracted in a historical first-year view.
The shares (10%, 20%, 30%) and the 50/50 split between 5- and 15-year items are our what-if settings. They are not IRS numbers and not findings about your building. You can change both under "Edit assumptions."
How we checked
The federal tax rules on this page come from the IRS sources below, checked October 6, 2026. We read provider prices on the providers' own pages the same day. We independently recalculated the worked examples, including the original-year and catch-up comparisons, and checked the method against primary IRS material. No CPA or engineer has reviewed this page. If that changes, we'll say who and what they reviewed.
Tax sources
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IRS Publication 946, How To Depreciate Property (2025): recovery periods, conventions, bonus rates by date, correcting depreciation
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IRS Notice 2026-11: the January 19, 2025 cutoff, tax acquisition rules, and transition election
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IRS Instructions for Form 4562 (2025): bonus rates
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IRS Publication 925, Passive Activity and At-Risk Rules: passive losses, the $25,000 allowance, real estate professionals
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IRS Instructions for Form 8582: allowance eligibility, filing status, modified adjusted gross income, and other losses
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IRS Publication 527, Residential Rental Property: splitting cost between land and building
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IRS Publication 544, Sales and Other Dispositions of Assets: tax on depreciation when you sell
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IRS Topic 409, Capital gains and losses: the individual rate limit for unrecaptured Section 1250 gain
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IRS bonus depreciation regulations: the prior-depreciable-interest and related-party acquisition rules, applied with current guidance
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IRS Notice 2026-16: qualified production property, which is outside this model
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IRS Publication 5653, Cost Segregation Audit Techniques Guide: what a study needs. This guide is for IRS examiners. It is not legal authority.
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IRS, tax year 2026 inflation adjustments: 2026 tax brackets
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California FTB, Summary of Federal Income Tax Changes, analysis of Public Law 119-21 §70301: an official example of state nonconformity with federal bonus depreciation
Provider sources (their own published statements)
- CostSegregation.com: price example, basis limit, three example results
- CostSegregation.com FAQ: software eligibility, support, and the differently worded $1.5 million boundary
- R.E. Cost Seg, cost segregation study guide: starting prices, typical shares, worked example
- R.E. Cost Seg Rapid Report and Fully Engineered Study: current starting prices, property scope, and additional tax work
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