Cost Segregation

Does cost segregation actually pencil for you?

It accelerates depreciation — but for many mid-bracket owners the benefit just suspends as a passive loss. Enter your situation and we'll tell you plainly whether it's worth the study cost.

Your property

A cost-seg study front-loads depreciation. The real question is whether it’s worth it for you — this tells you straight.

Building basis— excluding land

Cost of the study— typical $4k–$15k

Your marginal tax bracket

Tax year

I bought this property after 19 January 2025That date decides the bonus depreciation rate. Property committed to before it stays on the older, lower schedule — which changes the answer a lot. Go by the binding contract date, not the closing date.My rental losses are currently passive-suspendedNot a short-term rental, no real-estate-professional status (REPS), and income over the phaseout — so paper losses just park on my return.

Does it pencil for you?

First-year benefit · illustrative

Your Landlord Guide
Est. 2026

Verdict

This likely pencils — even the low end of the benefit clears the study cost.

Calculated at the pre-2025 bonus rate, because you didn’t tick the acquisition date above. If you bought after 19 January 2025, tick it — the number changes substantially.

Because your losses are usable this year, the front-loaded deduction turns into real cash at your 32% rate. Heads-up: depreciation recapture claws part of this back when you sell, so treat it as a deferral, not a permanent win.

Basis reclassified to short-life

18% – 33% of building basis

$54,000 – $99,000

Estimated first-year tax benefit

Deduction × 32% · 100% bonus

$6,912 – $12,672

First-year benefit to youAn estimate for discussion

$6,912 – $12,672

Informational purposes only — estimates for discussion, not tax, legal, or financial advice. No professional-client relationship is created. Consult a qualified CPA about your situation.

See if it’s worth it for your situation

A specialist checks whether the loss is actually usable for you — no obligation.

How this is calculated · sources

Every figure traces to a source

Cost-seg reclassification ranges
IRS Pub 946 — How To Depreciate Property (§168(k) bonus) ↗

What this estimate assumes

Reclassification % is a general 18–33% range, not a property-specific study.
The bonus depreciation rate depends on when you committed to buying: property acquired after 19 January 2025 gets the permanent 100%; anything earlier stays on the older phase-down, which we model for a 2025 placed-in-service year.
If your losses are passive-suspended, the benefit is a timing play (shown as $0 now).
Your marginal rate is applied flat to the whole deduction. A large deduction can drop you through brackets, so the real benefit is usually a little lower.
Recapture claws back part of the benefit when you sell — and the accelerated slice is recaptured at your ordinary income rate rather than the 25% cap that applies to the building. If the rate you deduct at and the rate you recapture at are similar, this is a timing play rather than a saving.