ADU (Accessory Dwelling Unit)
ADU cost segregation: $8K–$30K Year-1 deductions.
ADUs are small but expensive per square foot — modern finishes, full kitchen, full bath, often premium MEP. The reclassification percentage is high; the benefit just scales with size.
Real examples
What adu cost seg looks like in practice.
Los Angeles, CA
Purchased $280K
New-build ADU rented as STR
Year-1 federal benefit
$22,400
Portland-style
Purchased $220K
ADU as long-term rental
Year-1 federal benefit
$15,400
Estimates assume 37% federal bracket and full first-year usability of the loss (active income offset or REPS). Your actual benefit varies with bracket, basis allocation, and CPA's treatment.
Good fit when…
- ✓Newly-built ADUs (the depreciable basis is well-documented)
- ✓ADUs rented as STR — material participation may apply
Skip it when…
- ×ADUs under $100K basis where the study fee gets thin against the benefit
Estimate
Run the numbers on your adu.
Pre-set to ADU defaults — adjust price + bracket to match your property.
Estimated Year-1 tax savings
$32,560
on $88,000 of accelerated deductions
5-yr15-yr27.5/39-yr
Study cost
$795
ROI on study
41×
Delivery
< 1 hour
Estimate based on RSMeans 2024 cost data and IRC §168(k). Your actual result varies with property age, condition, and basis allocation.