Cost Segregation Tax Savings Calculator
Calculate potential tax savings from cost segregation studies on commercial and rental properties
About this calculator
The Cost Segregation Tax Savings Calculator helps property owners estimate potential tax benefits from cost segregation studies on commercial and rental properties. Cost segregation accelerates depreciation by reclassifying building components from 39-year (commercial) or 27.5-year (residential) schedules to shorter 5, 7, or 15-year periods. This strategy can generate substantial upfront tax deductions, improve cash flow, and reduce overall tax liability. The calculator provides quick estimates to help determine if a formal cost segregation study would be financially beneficial for your property investment.
How to use
Enter your property's purchase price, type (commercial or residential rental), and acquisition date. Input your marginal tax rate and any additional state tax rates. The calculator will estimate the accelerated depreciation amounts, potential first-year tax savings, and cumulative benefits over time to help you evaluate the cost segregation opportunity.
Frequently asked questions
What is cost segregation and how does it work?
Cost segregation reclassifies building components into shorter depreciation schedules, accelerating tax deductions from standard 27.5-39 year periods to 5-15 years.
What types of properties qualify for cost segregation?
Commercial buildings, rental properties, manufacturing facilities, hotels, restaurants, and most income-producing real estate qualify for cost segregation studies.
When is the best time to perform cost segregation?
Cost segregation can be done in the year of purchase, after renovations, or retroactively using look-back studies for properties purchased in previous years.