Cost segregation, explained.
Plain-English breakdowns of bonus depreciation, passive losses, REPS, the STR loophole, and the IRS rules that govern rental property tax strategy.
Affordable Cost Segregation: What $495 Actually Gets You (And What It Doesn't)
A $495 cost segregation study uses the same RSMeans data and IRS classification rules as a $5,000 study. Three real examples with tax savings math, and when to skip it.
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Cost Segregation for Airbnb: 2026 Guide + Real Numbers
Airbnb owners reclassify 25-35% of purchase price into accelerated depreciation. Named case study ($650K STR = $59,524 Y1 tax savings), comparison table, 11 FAQs.
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Augusta Rule Guide (2026): IRC §280A(g) 14-Day Tax-Free Home Rental
The Augusta Rule (IRC §280A(g)) lets you rent your primary residence to your business for up to 14 days per year with the rental income tax-free to you. Covers documentation, FMV substantiation, and audit-proof execution.
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Backdoor Roth IRA Guide (2026): Pro-Rata Rule, Form 8606, and Mega Backdoor
The Backdoor Roth lets high earners above the $240K MFJ / $161K single Roth phaseout still get money into a Roth IRA. Covers the pro-rata rule, Form 8606, and the mega backdoor 401(k) add-on.
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ADU Cost Segregation: The Complete Guide to Accelerating Depreciation on Your Accessory Dwelling Unit
ADUs are one of the strongest use cases for cost segregation. 18-25% of construction cost typically reclassified to 5-year and 15-year property. Here
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Cost Segregation in Atlanta, GA: $18K-$42K Year 1
Atlanta rental and STR investors save $18K-$42K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Boise, ID: $18K-$40K Year 1
Boise rental and STR investors save $18K-$40K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Charleston, SC: $25K-$50K Year 1
Charleston rental and STR investors save $25K-$50K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Charlotte, NC: $20K-$45K Year 1
Charlotte rental and STR investors save $20K-$45K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Chicago Cost Segregation: Why Cold-Climate Infrastructure and Condo-Heavy Inventory Need Different Math
Chicago cost seg splits differently than Sun Belt markets. Radiant floor, basement waterproofing, rooftop decks, and condo association math drive the reclassification. IL 4.95% flat state tax with full federal conformity.
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Cost Segregation in Dallas, TX: $18K-$42K Year 1
Dallas rental and STR investors save $18K-$42K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Hilton Head Cost Segregation: Golf-Community Villas, POA Rules, and the Multi-Generational Family Market
Hilton Head
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Cost Segregation in Houston, TX: $16K-$38K Year 1
Houston rental and STR investors save $16K-$38K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Nashville, TN: $25K-$55K Year 1
Nashville rental and STR investors save $25K-$55K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Orlando, FL: $20K-$50K Year 1
Orlando rental and STR investors save $20K-$50K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation Calculator: Your % vs. 100+ Real Studies
Enter your property and see your estimated 5-year, 15-year, and 27.5/39-year allocation, your Year-1 deduction range, and how it compares to 100+ properties in our calibration database. Same engine that runs our paid studies.
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Cost Segregation in Portland, OR: $24K-$52K Year 1
Portland rental and STR investors save $24K-$52K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Raleigh, NC: $20K-$48K Year 1
Raleigh rental and STR investors save $20K-$48K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Salt Lake City, UT: $22K-$48K Year 1
Salt Lake City rental and STR investors save $22K-$48K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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What's Inside a Cost Segregation Report? Section-by-Section Walkthrough
Walk through a real 35-page cost segregation study section by section. See the executive summary, MACRS schedules, component breakdown, and what your CPA actually files.
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San Antonio Cost Segregation: The Military-Base MTR Market Most Investors Overlook
San Antonio
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Cost Segregation in San Diego, CA: $40K-$85K Year 1
San Diego rental and STR investors save $40K-$85K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Scottsdale, AZ: $45K-$95K Year 1
Scottsdale rental and STR investors save $45K-$95K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Seattle, WA: $30K-$65K Year 1
Seattle rental and STR investors save $30K-$65K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Tampa Cost Segregation: Why LTR Conversion Properties Are the Sleeper Play
Tampa is an LTR-dominant market with 2020–2022 buyers sitting on inflated basis and softening rents. Cost segregation turns negative cash flow into tax-positive holds. Florida zero state tax makes the math clean.
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We Built a Free Embeddable Cost Seg Calculator (And You Can Have It)
Free cost segregation calculator widget for your website. One line of code. Light and dark themes. No account, no catch.
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Opportunity Zones Guide (2026): 10-Year Step-Up, 180-Day Window, and the 2028 Sunset
Opportunity Zones defer current capital gains and eliminate gain on QOF investments held 10+ years. The program sunsets in 2028 — last chance to start the 10-year clock. Full mechanics under IRC §1400Z-2.
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Passive Activity Loss Rules: When Rental Losses Can Offset W-2 Income (2026)
In most cases, rental losses can
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Rental Property Depreciation: $11K/Year vs $45K+ Year 1 (2026)
Most rental properties depreciate at ~$11K/year over 27.5 years. With cost segregation, investors often deduct $45K-$100K in Year 1 instead. Real examples, tax math, and recapture explained.
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Selling After Cost Segregation: Recapture Math (2026)
Done a cost seg study and now selling? Here
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Why Cost Segregation Reclassifies 25–35% on STRs vs 15–22% on Long-Term Rentals
Short-term rental owners get 50–70% more accelerated depreciation than unfurnished rentals. Here
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Affordable Cost Segregation in 2026: What $495–$795 Gets You
Traditional cost seg studies cost $5,000-$15,000. Ours start at $495. Here
Read Is Cost Seg Worth It on a $400K Rental? Here's the Real Math
Real numbers on a $400K rental: $1,200 study fee, ~$80K Year-1 deductions, ~$30K tax savings at 37%. When the math works — and the case where it doesn
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The Disadvantages of Cost Segregation (When It Doesn't Pencil)
Cost segregation isn
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Form 3115 for Cost Segregation (How It Works)
Form 3115 lets you claim missed depreciation using cost segregation. Here
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How to Reduce or Defer Depreciation Recapture: 5 Real Strategies (2026)
Depreciation recapture often applies but the economic impact can be deferred or offset. Five strategies: 1031 exchange, step-up in basis, installment sale, passive loss offset, and continued holding.
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MACRS Depreciation Explained: Property Classes and How Cost Segregation Changes the Math
MACRS is the depreciation system nearly every rental property uses. Here
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Material Participation for STR Owners: The 7 IRS Tests and How to Document Your Hours
Material participation is how STR owners unlock non-passive losses that offset W-2 income. Here are the 7 IRS tests, what counts, and how to document hours the right way.
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Can an Airbnb Offset W-2 Income? The 7-Day Rule Explained (With Examples)
Yes — under Treas. Reg. §1.469-1T, an Airbnb averaging ≤7-day stays is non-passive. Material participation rules, real W-2 offset examples, common traps.
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First-Time Airbnb Owner? The Cost Seg Playbook Most CPAs Won't Mention
If you bought your first Airbnb this year and nobody mentioned the 100-hour material participation rule, you
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How to Track Material Participation Hours for the STR Loophole (Free Template)
The STR loophole requires documented material participation. Here
Read What Happens If You Don't Materially Participate? (Cost Seg Losses Become Passive)
If you don
Read Who Is Eligible for Cost Segregation? (Property Types, Ownership, Thresholds)
Most income-producing depreciable real property placed in service under modern MACRS qualifies. The economic threshold is narrower: depreciable basis, tax bracket, hold period, and usable losses.
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Why Traditional Cost Seg Firms Charge $10,000: A Look Behind the Quote
Traditional cost seg firms aren
Read Cost Seg Components List: Every Item the IRS Reclassifies
Complete list of building components reclassified in a cost segregation study. 5-year, 7-year, and 15-year MACRS categories with examples.
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How Cost Segregation Shows Up on Your Tax Return
Step-by-step breakdown of how a cost seg study flows through Schedule E, Form 4562, and Form 3115. No jargon, real examples.
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Cost Segregation Benchmarks by Property Type (2026)
Cost segregation benchmarks across residential and commercial property types. Typical reclassification rates, tax savings ranges, and key drivers.
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Cost Segregation If You Plan to Sell Soon: Worth It?
Cost segregation with a short holding period: depreciation recapture vs. Year 1 tax savings. Here
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Inherited Property Cost Seg: Turn a Step-Up Into Year-1 Savings
Inherited real estate gets a stepped-up basis at FMV — and cost seg accelerates depreciation against that fresh basis. Lookback strategy and Form 3115.
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Cost Seg for Mixed-Use: How the Residential/Commercial Split Works
Mixed-use buildings split between 27.5yr residential and 39yr commercial depreciation. See how the allocation works and what percentages to expect by use type.
Read Primary Residence to Rental: Cost Segregation Guide
Converting your home to a rental property creates a new depreciation opportunity. Here
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Cost Segregation for Renovations: Write Off Upgrades Year 1
Kitchen, bath, flooring, HVAC, and landscaping upgrades qualify for 5- or 15-year depreciation instead of 27.5. How to reclassify renovation costs fast.
Read Does Your State Allow Bonus Depreciation? (Cost Seg by State)
Half the states don
Read DIY Cost Segregation: Will the IRS Accept It?
DIY cost segregation is possible but rarely survives IRS scrutiny. What
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Do I Need REPS for Cost Segregation? (No, But...)
You don
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Does Cost Segregation Trigger an IRS Audit? What the ATG Actually Says (2026)
No — cost segregation is an IRS-recognized strategy with its own 120-page Audit Techniques Guide. Here
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Does Cost Segregation Require a Site Visit? (2026)
Traditional cost seg firms require site visits. Modern providers use remote observation with satellite imagery, assessor data, and cost databases instead.
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Why Some Cost Seg Studies Take 6 Weeks (and Others Take 1 Hour)
Traditional firms send an engineer on-site and build manually — 4–8 weeks. Automated providers use satellite imagery and assessor data — under an hour. Why.
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Cost Segregation Cost: Why Some Pay $495 and Others $15,000
Same RSMeans data, same MACRS classes, same IRS forms — pricing still ranges from $495 to $15,000+. The factor that drives the spread, and when each makes sense.
Read Is Bonus Depreciation Permanent? OBBBA 2025 Update
The OBBBA restored 100% bonus depreciation permanently for 2025 and beyond. Here
Read Section 179 vs Bonus Depreciation: Real Estate Guide
Section 179 and bonus depreciation both accelerate deductions but work differently for real estate. When each applies and how they interact with cost seg.
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The STR Tax Loophole: How Rental Losses Offset W-2 Income (2026)
Short-term rental owners can use depreciation losses to offset W-2 income. See the material participation rules, real tax math, and when it actually works.
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Documents for a Cost Seg Study: What You Need (+ What Helps)
Five required items to order a cost segregation study, plus optional documents that improve accuracy. Takes about 5 minutes.
Read IRS Cost Segregation ATG: The 13 Elements That Make a Study Defensible
The IRS Audit Techniques Guide requires 13 principal elements in a cost segregation study. See what each element means and how compliant studies document them.
Read When NOT to Do Cost Segregation (5 Red Flags)
Cost segregation isn
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Cost Segregation in Las Vegas, NV: $25K-$70K Year 1
Las Vegas rental and STR investors save $25K-$70K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Jacksonville, FL: $20K-$60K Year 1
Jacksonville rental and STR investors save $20K-$60K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Minneapolis, MN: $25K-$75K Year 1
Minneapolis rental and STR investors save $25K-$75K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in NYC: $50K-$150K Year 1
NYC rental and STR investors save $50K-$150K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Boston, MA: $30K-$100K Year 1
Boston rental and STR investors save $30K-$100K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
Read Cost Segregation in Washington, DC: $35K-$100K Year 1
Washington, DC rental and STR investors save $35K-$100K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in San Francisco, CA: $40K-$120K Year 1
San Francisco rental and STR investors save $40K-$120K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in CO Springs, CO: $20K-$60K Year 1
Colorado Springs rental and STR investors save $20K-$60K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Asheville, NC: $20K-$65K Year 1
Asheville rental and STR investors save $20K-$65K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Myrtle Beach, SC: $15K-$50K Year 1
Myrtle Beach rental and STR investors save $15K-$50K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Park City, UT: $30K-$100K Year 1
Park City rental and STR investors save $30K-$100K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
Read Cost Segregation in Big Bear Lake, CA: $15K-$55K Year 1
Big Bear Lake rental and STR investors save $15K-$55K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Denver: $25K–$60K Year 1 Savings
Denver rental properties often generate $25K–$60K in year 1 tax savings from cost segregation. See real examples across $400K–$1M+ properties and how savings vary by property type. Studies from $495. Full report in under 1 hour.
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Cost Segregation in Miami, FL: $40K-$120K Year 1
Miami rental and STR investors save $40K-$120K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Phoenix, AZ: $15K-$60K Year 1
Phoenix rental and STR investors save $15K-$60K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Smoky Mountains, TN: $25K-$60K Year 1
Smoky Mountains rental and STR investors save $25K-$60K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
Read Multifamily Cost Segregation: 20-30% Reclassified (Real Studies)
Multifamily properties typically reclassify 20-30% of building value through cost segregation. Real examples from duplex to 100+ unit apartment complex studies.
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Depreciation Recapture After Cost Segregation (2026)
You face depreciation recapture whether you use cost seg or not. The math shows cost segregation puts you $58K+ ahead. Here
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Cost Segregation in Lake Tahoe, CA: $50K-$90K Year 1
Lake Tahoe rental and STR investors save $50K-$90K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
Read What Your CPA Needs for Your Cost Seg Study
Got a cost seg study -- now what? A practical guide to working with your CPA on Form 4562, Form 3115, bonus depreciation, and state tax implications.
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Cost Segregation in Outer Banks, NC: $30K-$68K Year 1
Outer Banks rental and STR investors save $30K-$68K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Can Cost Seg Offset W-2 Income? Yes — Here's When It Actually Works
Yes — but only under the 7-day STR rule or Real Estate Professional Status. $400K Airbnb math, IRS qualification tests, and three common disqualifiers.
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Cost Segregation in Key West, FL: $50K-$120K Year 1
Key West rental and STR investors save $50K-$120K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation and the 2% Rule: Does It Still Work?
The 2% rule is nearly impossible in 2026. But Year 1 tax savings from cost segregation mean properties that fail it can still deliver strong returns.
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Cost Segregation in Los Angeles, CA: $50K-$200K Year 1
Los Angeles rental and STR investors save $50K-$200K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
Read Cost Segregation ROI: 10-20x Returns by Property Type
Is a cost seg study worth it? We break down ROI with real examples, from a $500K SFR to a $2M commercial property. Most investors see 10-20x returns.
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Cost Segregation in Gulf Shores, AL: $20K-$40K Year 1
Gulf Shores rental and STR investors save $20K-$40K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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7 STR Tax Deductions Most Airbnb Owners Miss
Most Airbnb owners leave $40K-$100K in tax deductions on the table. Here are the 7 most commonly missed STR deductions and the math behind each one.
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Cost Segregation in Maui, HI: $45K-$75K Year 1
Maui rental and STR investors save $45K-$75K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation in Destin & PCB, FL: $25K-$50K Year 1
Destin and PCB rental and STR investors save $25K-$50K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Minimum Property Value for Cost Segregation ($150K?)
Traditional firms charge $5K-$15K, so cost seg only made sense for expensive properties. At $495, it works for properties as low as $150K.
ReadBonus Depreciation in 2026: What STR Investors Need to Know
100% bonus depreciation is permanently restored for 2025+ under OBBBA. Here's how to combine it with cost segregation for maximum Year-1 savings.
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Cost Segregation in Austin, TX: $30K-$80K Year 1
Austin rental and STR investors save $30K-$80K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation for New Construction: Do It Day One
New construction is the best time for cost segregation. With 100% bonus depreciation restored, write off 20-35% of your build cost in Year 1.
Read Cost Segregation in Savannah, GA: $30K-$60K Year 1
Savannah rental and STR investors save $30K-$60K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
Read Commercial Cost Segregation: Office, Retail & Industrial
Commercial owners reclassify 20-40% of their 39-year basis into 5, 7, or 15-year categories. How cost seg works for office, retail, and industrial.
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How to Choose a Cost Segregation Company (2026)
Most cost seg firms charge $5K-$15K and take weeks. Here
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Cost Segregation in Joshua Tree, CA: $30K-$50K Year 1
Joshua Tree rental and STR investors save $30K-$50K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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Cost Segregation After a 1031 Exchange: What Actually Happens
Can you do cost segregation after a 1031 exchange? Yes — but the mechanics of carryover basis vs excess basis change how it works. Full breakdown with examples.
Read Cost Segregation in Sedona, AZ: $40K-$70K Year 1
Sedona rental and STR investors save $40K-$70K in Year 1 with cost segregation + 100% bonus depreciation. See real savings by property type.
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House Hacker's Duplex: $15K–$40K in Year-1 Tax Savings
A duplex you live in qualifies for cost seg on the rental half. Real numbers on a $400K owner-occupied duplex: study cost, Year-1 deductions, §469(i) rules.
Read Lookback Study: Claim Missed Depreciation (Form 3115)
Never did a cost seg study? A lookback study with Form 3115 lets you catch up on missed accelerated depreciation in a single tax year.
Read Why We Built Cost Seg Smart | Our Story
We
Read Cost Seg vs Standard Depreciation: $50K Difference
Side-by-side comparison on a $750K rental: cost segregation vs. straight-line depreciation. The Year 1-5 cash flow gap is enough for another down payment.
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5 Tax Mistakes Rental Investors Make (+ Fixes)
Most rental investors overpay on taxes. The 5 most common tax mistakes and straightforward fixes that could save you tens of thousands.
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First-Year Rental Depreciation Guide for New Owners
Beginner guide to first-year rental depreciation. How to calculate your depreciable basis, the mid-month convention, and using cost seg for Year 1.
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