Cost Segregation ROI Calculator
Is a cost segregation study worth it for your property? This calculator reclassifies your depreciable basis into 5/7/15-year assets (eligible for 100% bonus depreciation under OBBBA 2025), computes year-1 tax savings, and shows you the return on the study fee — based on your property type, tax bracket, and investor status.
How cost segregation math works
The problem with straight-line depreciation
The IRS defaults to straight-line depreciation: 1/27.5 per year for residential rental (SFR, 2-4 unit), 1/39 per year for commercial and multi-family 5+. A $1.4M commercial property with 80% depreciable basis ($1.12M) generates only $28,700 per year in depreciation — for 39 years. For a high-income investor, that's meaningful, but it's spread thin.
What cost segregation does
A cost segregation study, done by an engineering firm, re-examines the property and reclassifies components into shorter-lived asset classes:
- 5-year personal property — carpeting, appliances, specialty electrical, decorative fixtures, parking-related equipment. Typically 12–15% of a property's depreciable basis.
- 7-year personal property — office furniture, specialized mechanical components. Typically 6–8%.
- 15-year land improvements — parking lots, fencing, exterior landscaping, sidewalks. Typically 7%.
- Remaining structure — the building itself, at 27.5 or 39 years as before.
Bonus depreciation: why 2025–2026 is the best time
Under the One Big Beautiful Bill Act (OBBBA, signed July 2025), 100% bonus depreciation was permanently restored for qualified property placed in service after January 19, 2025. This means: every dollar of 5/7/15-year assets reclassified via cost segregation is deductible in full in year 1.