Estimate how much you could save with a cost segregation study on your investment property
This calculator uses industry-standard reclassification percentages based on property type to estimate how much of your purchase price can be moved from long-life depreciation (27.5 or 39 years) into shorter recovery periods (5, 7, and 15 years). The reclassifiable portion is then multiplied by the current bonus depreciation rate and your marginal tax rate to produce an estimated tax savings figure.
These results are estimates intended to help you evaluate whether a cost segregation study is worth pursuing. Actual savings depend on a detailed engineering-based analysis of your specific property, including construction materials, finishes, site improvements, and building systems. Every property is unique, and a professional study will produce more precise numbers tailored to your situation.
This calculator applies 100% bonus depreciation to all reclassified assets. Under the One Big Beautiful Bill Act (OBBBA), 100% first-year bonus depreciation has been made permanent for qualifying property. This means the entire reclassified amount can be deducted in Year 1, maximizing the immediate tax benefit of a cost segregation study.
| Property Type | Typical Reclassification Rate | Recovery Period (Without Study) | Key Reclassifiable Components |
|---|---|---|---|
| Short-Term Rental (STR) | 35-45% | 39 years (nonresidential) | Hospitality furniture, appliances, flooring, cabinetry, decorative lighting, landscaping |
| Long-Term Rental (LTR) | 25-35% | 27.5 years (residential) | Cabinetry, flooring, appliances, plumbing fixtures, secondary electrical, site work |
| Commercial Office | 30-40% | 39 years (nonresidential) | Specialty electrical, data cabling, carpeting, decorative finishes, parking lot paving |
| Self-Storage | 30-45% | 39 years (nonresidential) | Roll-up doors, security systems, paving, fencing, specialized electrical, climate systems |
| Hotel / Hospitality | 35-50% | 39 years (nonresidential) | FF&E (furniture, fixtures, equipment), specialty plumbing, decorative elements, signage |
| Restaurant | 40-55% | 39 years (nonresidential) | Kitchen equipment, exhaust systems, walk-in coolers, specialty plumbing, decorative interiors |
Note: Actual reclassification percentages vary based on individual property characteristics and construction quality. These ranges represent typical results from completed studies.
This calculator provides a useful estimate, but nothing replaces a professional, engineering-based cost segregation study. AE Tax Advisors delivers audit-ready studies at $1 per square foot with no hidden fees.
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