Cost Segregation Calculator For Real Estate Depreciation
Disclaimer
Current Tax YearDepreciation over timeReallocations
Details
Year 1 Estimated Depreciation Expense:
$96,869
Year 1 Potential Tax Savings at a 37% Income Tax Rate:
$35,842
5 Years Personal Property:
$1
15 Years Site Improvements:
$1
Max Year Real Property:
$1
Depreciation After 1 year with study:
$1
Depreciation After 1 year without study:
$1
How Much Can You Save With Cost Segregation
Why Use This Cost Segregation Calculator?
Cost segregation is a powerful tax strategy that accelerates depreciation deductions, improving cash flow for real estate investors. By identifying building components that qualify for shorter recovery periods, property owners can front-load depreciation expenses and reduce taxable income. However, estimating these benefits without a full cost segregation study can be challenging.
The cost segregation calculator on Maven Cost Segregation’s website is designed to give real estate investors a clear estimate of potential depreciation savings. Whether you're analyzing a property before purchase or assessing tax benefits for an existing investment, this tool provides a data-driven estimate based on industry averages.
It’s important to note that this is an estimate, not a final study. A full cost segregation study calculator involves a detailed engineering-based analysis, which considers property-specific details and IRS-compliant methodologies. While this free cost segregation calculator offers valuable insight, actual depreciation benefits depend on a comprehensive assessment tailored to your specific property.
For a deeper understanding of how cost segregation works step by step, check out our detailed guide here. By using this residential cost segregation calculator, investors can gain a better understanding of their potential tax savings and make informed decisions about whether a full study is worth pursuing.
The cost segregation calculator on Maven Cost Segregation’s website is designed to give real estate investors a clear estimate of potential depreciation savings. Whether you're analyzing a property before purchase or assessing tax benefits for an existing investment, this tool provides a data-driven estimate based on industry averages.
It’s important to note that this is an estimate, not a final study. A full cost segregation study calculator involves a detailed engineering-based analysis, which considers property-specific details and IRS-compliant methodologies. While this free cost segregation calculator offers valuable insight, actual depreciation benefits depend on a comprehensive assessment tailored to your specific property.
For a deeper understanding of how cost segregation works step by step, check out our detailed guide here. By using this residential cost segregation calculator, investors can gain a better understanding of their potential tax savings and make informed decisions about whether a full study is worth pursuing.
How to Use the Real Estate Cost Segregation Calculator
The cost segregation real estate calculator on Maven Cost Segregation’s website is designed to be straight forward while still giving insight into the complexities of your specific scenario. Make sure to fill in all the proper details to get an accurate estimate.
Step 1: Access the Calculator
Navigate to the cost segregation calculator on our website. The tool is available for free and requires no signup or payment to generate an initial depreciation estimate.
Step 2: Enter Key Property Details
To ensure the most accurate estimate, you’ll need to input the following details:
Choose from residential, commercial, self-storage, or other investment property types. The classification affects depreciation schedules and asset allocations.
Select the specific category of your property, such as a single-family home, condo, multifamily building, or office space. Asset class distinctions are important for IRS depreciation rules.
Enter the amount subject to depreciation. This is calculated as:
- Acquisition price (excluding land value)
- Plus any capital improvements (rehab costs that qualify as capital expenditures)
Minus land value, since land itself is non-depreciable
The date the property was first made available for rent, not necessarily the purchase date. This is typically when the property was listed as available to tenants.
Select your applicable income tax rate. If unsure, refer to prior tax returns or consult with a CPA. This determines your estimated tax savings from accelerated depreciation.
Choose between short-term or long-term rental. This affects the depreciation schedule, as short-term rentals are classified as non-residential and depreciate over 39 years, whereas long-term residential properties follow a 27.5-year depreciation schedule.
Once all inputs are filled, click "Generate Calculation", and the tool will display an estimate of your depreciation benefits. While this free cost segregation calculator provides a helpful projection, actual depreciation benefits require a detailed engineering study to ensure IRS compliance and maximum tax advantages.
For more insights into real estate tax strategies, check out our guide on how to unlock massive tax benefits with Real Estate Professional Status (REPS).
For more insights into real estate tax strategies, check out our guide on how to unlock massive tax benefits with Real Estate Professional Status (REPS).
Using This Calculator for STR Cost Segregation and Bonus Depreciation
Bonus depreciation allows property owners to deduct a large percentage of eligible assets in the first year rather than spreading deductions over time. However, as of 2024, bonus depreciation has phased down to 60% and will continue declining each year unless legislative changes extend it. This makes 2024 an important year to consider cost segregation, as it allows investors to claim as much accelerated depreciation as possible before bonus depreciation is further reduced.
Cost Segregation Studies: How Accelerated Depreciation Affects First-Year Deductions
A key benefit of cost segregation is the immediate tax impact. For example, if an investor falls within the 37% tax bracket, a cost segregation real estate calculator might estimate first-year depreciation at $96,869, resulting in $35,842 in potential tax savings. These savings can be reinvested into additional properties, business growth, or other financial priorities. Learn how to achieve 100% bonus depreciation return in 2025
The Advantage of Upfront Depreciation in Cost Segregation
A fundamental principle of cost segregation is the time value of money—a dollar saved today is worth more than a dollar saved 10 or 20 years from now. By accelerating depreciation deductions, investors can:
- Reduce taxable income in early ownership years, when cash flow is often most critical.
- Reinvest tax savings into additional properties or improvements.
- Maximize financial flexibility rather than waiting decades for the same deductions.
For a deeper dive into how cost segregation works in real-world scenarios, take a look at our case studies on cost segregation benefits to see how investors have used these strategies to reduce their tax burden.
Adjusting Your Cost Segregation for Short-Term Rentals vs. Long-Term Rentals
One of the most important factors in a cost segregation study calculator is determining whether your property qualifies as a long-term rental or a short-term rental, as this classification affects the depreciation schedule and potential tax benefits.
Long-Term Rentals: 27.5-Year Depreciation Schedule
For residential rental properties leased on a long-term basis (typically leases exceeding 30 days), the IRS assigns a 27.5-year depreciation period. This means:
Long-Term Rentals: 27.5-Year Depreciation Schedule
For residential rental properties leased on a long-term basis (typically leases exceeding 30 days), the IRS assigns a 27.5-year depreciation period. This means:
- The structural components of the property depreciate evenly over 27.5 years.
- Without a cost segregation study, all assets would follow this schedule, resulting in lower annual deductions.
- With a study, certain components (like flooring, cabinetry, and land improvements) may qualify for 5-year and 15-year depreciation schedules, allowing for accelerated deductions.
Short-Term Rentals: 39-Year Depreciation Schedule
Properties used as short-term rentals (STRs)—typically those rented for an average stay of less than 30 days per guest—are classified by the IRS as non-residential real estate. This means:
Properties used as short-term rentals (STRs)—typically those rented for an average stay of less than 30 days per guest—are classified by the IRS as non-residential real estate. This means:
- The default depreciation schedule is 39 years, rather than 27.5 years.
- Structural components depreciate over a longer period, reducing annual deductions.
- A cost segregation study becomes even more critical for STR investors, as reallocating assets into shorter life classes (5-year, 15-year) can help offset the longer structural depreciation period.
Tax Strategy Considerations for Short-Term Rentals
While STRs have a longer depreciation schedule, they also offer unique tax advantages, particularly through the short-term rental loophole. Under certain conditions, STR owners may be able to:
While STRs have a longer depreciation schedule, they also offer unique tax advantages, particularly through the short-term rental loophole. Under certain conditions, STR owners may be able to:
- Avoid passive activity loss limitations, allowing them to use depreciation deductions against W-2 or active income.
- Increase tax deductions by applying cost segregation to offset rental income in the early years of ownership.
- Combine cost segregation with material participation rules to qualify for additional tax benefits.
Investors using the free cost segregation calculator should carefully consider their rental strategy and depreciation method, as long-term vs. short-term classification significantly impacts tax planning. For a more detailed breakdown, a full cost segregation study can ensure maximum tax efficiency based on IRS regulations and individual investment goals. You can also check our blog about Overlooked Financial Benefits for Real Estate Investors
Next Steps: Get a Customized Cost Segregation Proposal
The cost segregation real estate calculator provides a useful estimate, but for a detailed and IRS-compliant analysis, a full cost segregation study is necessary. Our team at Maven Cost Segregation specializes in engineering-based studies that maximize your tax savings while ensuring full compliance.
How to Get a Free Proposal:
How to Get a Free Proposal:
- Fill out a quick form with property details, purchase price, and rehab costs.
- Upload any supporting documents (e.g., Zillow/Redfin listings, property photos, Google Drive files).
- Schedule a free consultation—we’ll provide a detailed depreciation breakdown and estimated tax savings.
For questions or assistance, contact us directly—we’re here to help you make the most of your investment.
About the Author
Sean Graham, CPA specializes in cost segregation, tax depreciation, and real estate tax savings. As the Chief Technical CPA at Maven Cost Segregation: Tax Advisors, he has overseen 75+ cost segregation studies, helping investors maximize deductions.