Free Cost Segregation Calculator
Estimate accelerated depreciation benefits from a cost segregation study by reclassifying building components to shorter recovery periods.
First-Year Tax Savings
$12,058
First-Year Tax Savings vs % Reclassified to 5-Year Property
Cost Segregation Studies
Cost segregation accelerates depreciation by reclassifying building components from the standard 27.5 or 39-year schedule to 5, 7, or 15-year property.
Standard vs. Accelerated Recovery
Bonus Depreciation
With bonus depreciation (phasing down from 100%), reclassified property can be fully deducted in year one, dramatically increasing first-year tax benefits.
Typical Results
A cost segregation study typically reclassifies 20-40% of building cost, generating significant upfront tax savings.
Example Calculation
A $1,000,000 commercial building. 15% reclassified to 5-year, 5% to 7-year, 10% to 15-year. 35% tax rate. $15,000 study cost.
- 015-year property: $1,000,000 x 15% = $150,000 (year 1: $150,000 x 20% = $30,000)
- 027-year property: $1,000,000 x 5% = $50,000 (year 1: $50,000 x 14.29% = $7,145)
- 0315-year property: $1,000,000 x 10% = $100,000 (year 1: $100,000 x 5% = $5,000)
- 04Remaining 39-year: $700,000 (year 1: $700,000 / 39 = $17,949)
- 05Accelerated year 1 total: $30,000 + $7,145 + $5,000 + $17,949 = $60,094
- 06Standard year 1: $1,000,000 / 39 = $25,641
- 07Extra first-year depreciation: $60,094 - $25,641 = $34,453
- 08Tax savings: $34,453 x 35% = $12,059