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Calcimator

Cost Segregation Calculator

Estimate tax savings from a cost segregation study by reclassifying building components into shorter depreciation schedules with bonus depreciation.

Inputs

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Results

Year 1 Tax Savings

$39,289.09

≈ 4 years of state college

5-Year Tax Savings$37,545.45
Net Benefit (after study cost)$29,289.09
ROI on Study Cost292.89%
Additional Year 1 Depreciation$93,545.45
Cost Seg Year 1 Depreciation$111,727.27
Standard Annual Depreciation$18,181.82
Personal Property Reclassified$100,000.00
Land Improvements Reclassified$50,000.00
Depreciable Basis$500,000.00
Total Property Value600,000
Pv Benefit37,807
How to Use This Calculator
  1. Enter Building Value (excluding land) and Land Value for your commercial or investment property.
  2. Set Personal Property % (e.g. 20% for fixtures, appliances) and Land Improvements % (e.g. 10% for parking).
  3. Enter your Federal Tax Rate and State Tax Rate for accurate tax savings calculations.
  4. Input the Cost Segregation Study Fee (typically $5,000–$15,000) to see net benefit after study cost.
  5. Set the Bonus Depreciation % based on the tax year (60% in 2024, phasing down 20%/year).
  6. Review Year 1 Tax Savings and ROI on Study Cost to decide if cost segregation is worth pursuing.

How the result changes with Building Value ($)

Building Value ($)Year 1 Tax Savings
100,000,000$7,857,818.18
350,000,000$27,502,363.64
650,000,000$51,075,818.18
900,000,000$70,720,363.64

What each input means

Building Value ($)
Depreciable building value (excluding land).
Land Value ($)
Value of the land (not depreciable).
Personal Property (%)
% of building reclassified as 5/7-year property (carpets, fixtures, appliances).
Land Improvements (%)
% reclassified as 15-year property (parking, landscaping, sidewalks).
Federal Tax Rate (%)
Your marginal federal income tax rate.
State Tax Rate (%)
State income tax rate.
Cost Seg Study Fee ($)
Fee for the cost segregation study.
Bonus Depreciation (%)
Current bonus depreciation rate (100% phasing down 20%/yr from 2023).

What each result means

Year 1 Tax Savings
Additional tax savings in the first year from accelerated depreciation.
5-Year Tax Savings
Cumulative additional tax savings over 5 years vs straight-line.
Net Benefit (after study cost)
Year 1 tax savings minus cost of the study.
ROI on Study Cost
Net year-1 benefit / study cost.
Additional Year 1 Depreciation
Extra depreciation in year 1 vs standard.
Cost Seg Year 1 Depreciation
Total year 1 depreciation with cost segregation.
Standard Annual Depreciation
Annual depreciation without cost seg (27.5 yr straight-line).
Personal Property Reclassified
Amount moved to 5/7-year schedule.
Land Improvements Reclassified
Amount moved to 15-year schedule.
Depreciable Basis
Total depreciable basis (building value).

How this is calculated

Worked example, using the default values

  1. Identify Input Parameters
    4 parameters
    Building Value ($) = 500000, Land Value ($) = 100000, Personal Property (%) = 20, Land Improvements (%) = 10 = 8 input(s) provided
  2. Calculate Year 1 Tax Savings
    Year 1 Tax Savings = additionalYear1Deprec * combinedTaxRate
    39289.09 = $39,289.09
  3. Calculate 5-Year Tax Savings
    5-Year Tax Savings = additionalDeprec5Year * combinedTaxRate
    37545.45 = $37,545.45
  4. Calculate Net Benefit
    Net Benefit = year1TaxSavings - studyCost
    29289.09 = $29,289.09

Engine last updated . Checked against 1 independently-derived test — how we verify calculators.

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