Cost Segregation Study Calculator

A cost segregation study reclassifies parts of a commercial building so they depreciate far faster than the property as a whole, and this tool estimates the immediate deduction that follows. It shows the extra first-year deduction, the tax it saves at your bracket, and the return on investment (ROI) the study itself earns relative to what it costs to perform.

The calculator subtracts land value from the price to get the depreciable basis, which would otherwise be depreciated straight-line over 27.5 years (residential rental) or 39 years (commercial). It assumes a study moves 30% of that basis into 5-, 7- and 15-year property and deducts all of it in year one as 100% bonus depreciation, which the One, Big, Beautiful Bill made permanent for qualified property acquired after January 19, 2025. The other 70% stays on the 27.5- or 39-year schedule. The first-year total minus the ordinary straight-line deduction is the additional deduction, and multiplying it by your tax bracket gives the first-year tax savings. For simplicity the straight-line amounts are a full year's share, without the mid-month convention the IRS applies to buildings in the year they are placed in service.

A defensible study rests on an engineering-based analysis rather than accounting alone, and soft costs like architectural fees or permits often qualify for reclassification, so leaving them out shortchanges the result. On the return side, the ROI compares the first-year tax savings with the study's fee: (savings − fee) ÷ fee.