Understand cost segregation
A study separates qualifying shorter-life components from the building. This calculator lets you explore an allocation before discussing an actual study with a specialist.
FREE REAL ESTATE INVESTOR TOOL
Cost segregation
tax savings calculator.
Estimate accelerated depreciation for your rental property. Compare first-year deductions, explore the potential tax effect, and plan the STR work records that support your material participation.
An educational scenario, not a cost segregation study or tax advice. Your CPA should confirm property classification, bonus eligibility, and whether losses are usable.
YOUR ILLUSTRATIVE SCENARIO
Potential additional
first-year tax effect
Compared with building-only depreciation, assuming the additional deduction can be used at your selected federal rate.
- Depreciable building basis
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- Reclassified basis
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- Bonus depreciation
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- Non-bonus pool depreciation
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- Remaining building depreciation
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- Total first-year deduction
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- Without cost segregation
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- Additional first-year deduction
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Inputs stay in your browser. No account or email required.
THE ESTIMATE IS A STARTING POINT
Connect rental property depreciation
with records of your actual work.
Check deduction usability
A larger depreciation deduction is not automatically a smaller tax bill. Review your rental income, passive-loss treatment and other limits with a tax professional.
Keep your STR hour log
Use PropHours to record the date, property, task and actual time worked. Keep receipts, photos and notes alongside activities when documenting material participation.
Explore hour tracking and evidence tools →How this cost segregation calculator works
Building basis = purchase price × (1 − land allocation). Reclassified basis = building basis × reclassified share. Bonus depreciation = reclassified basis × selected bonus rate.
Any non-bonus balance in the reclassified pool uses a simplified first-year half-year MACRS rate: 20% for 5-year, 14.29% for 7-year, or 5% for 15-year property. The remaining building uses straight-line depreciation over your selected period, multiplied by (12 − service month + 0.5) ÷ 12.
Additional deduction = modeled cost-segregation deduction − building-only deduction. Potential tax effect = additional deduction × your federal marginal rate. These are rounded display values; calculations retain precision.
Want to include rental income, federal tax brackets and loss limits? Try the STR tax savings calculator.
What this estimate leaves out
Actual studies allocate several asset classes. Mid-quarter rules, alternative depreciation systems, elections, prior depreciation, study fees, state conformity, passive-loss and at-risk limits, excess business loss limits, AMT, NIIT and recapture on sale are not modeled. A first-year acceleration can reduce deductions in later years. This calculator does not determine your filing position or total tax savings.
COST SEGREGATION & STR RECORDS
Cost segregation calculator FAQ
Can I use this for an Airbnb or short-term rental?
Yes, as a simplified planning scenario. Enter the building classification and assumptions your advisor recommends. The length of guest stays alone is not enough to determine the building’s depreciation period.
How much could a cost segregation study save?
It depends on asset allocations, your tax rate and when you can use the deductions. Change the reclassified share to compare scenarios. The displayed amount is a modeled first-year tax effect, not a guaranteed refund or lifetime savings estimate.
Does 100% bonus depreciation apply to my property?
IRS guidance provides 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025. Eligibility, acquisition rules and elections still matter. The building itself does not become fully bonus-eligible simply because you commission a study. Confirm your inputs using IRS Publication 946 and your advisor.
Can cost segregation offset my W-2 income?
Not automatically. Passive-loss rules can postpone the benefit. For activities outside the rental definition, material participation can be relevant; rental real estate has additional rules, including the real estate professional exception. A checkbox or hours target cannot establish eligibility. See IRS Publication 925.
Is 100 hours enough for material participation?
One test requires more than 100 hours and at least as much participation as any other individual. Other tests and activity-specific rules exist. A total on its own does not establish that a test is met. Keep accurate work details for your advisor to evaluate.
What should my STR material participation log include?
Record the date, property, work performed and actual duration. Supporting photos, receipts and calendar context can help explain entries. PropHours keeps these details together and lets you review your progress; it does not certify that an activity qualifies for tax purposes.
Does PropHours provide cost segregation studies?
No. PropHours is activity and evidence record-keeping software. Use a qualified study provider and your tax professional for property allocations, tax calculations and advice.
BUILD THE RECORD AS YOU GO
Track the hours.
Keep the supporting evidence.
Bring your STR activity records to the tax conversation, alongside your cost segregation study.
See how PropHours works →