Cost Segregation Calculator

An engineer or specialist breaks the purchase price of a rental into its parts. Carpet, appliances, furnishings and some cabinetry and decorative fixtures become 5-year property, some commercial furnishings 7-year, and driveways, fencing, landscaping and pools 15-year land improvements. Those parts qualify for bonus depreciation, so instead of deducting the building evenly over 27.5 or 39 years you deduct a large share in the first year.

It depends on the price, how much the study reclassifies, your bracket and whether you can use the loss. In the example on this page, a $750,000 single-family rental owned by a real estate professional couple earning $400,000 gets $116,545 of extra first-year depreciation, which saves about $33,798 this year against a $5,000 study.

Yes, for property acquired after January 19, 2025 (Public Law 119-21 made it permanent). Property acquired earlier under a written binding contract keeps the old phase-down: 40% if placed in service in 2025 and 20% in 2026. "Acquired" usually means the day you closed; a purchase contract signed earlier counts only if it was binding, and one whose only penalty is losing an earnest-money deposit under 5% of the price is not (Treas. Reg. 1.168(k)-2(b)(5)). For 2025 returns you can also elect 40% instead of 100% for the year (IRC 168(k)(10)); the calculator assumes you do not. For earlier years the rate was 100% from 2018 through 2022, 80% in 2023 and 60% in 2024.

Yes. A look-back study on a property placed in service in an earlier year is a change in accounting method filed on Form 3115. All the depreciation you would have taken in the earlier years, including bonus depreciation at the rate for the year you placed it in service, is deducted at once in the current year as an IRC 481(a) adjustment (Rev. Proc. 2025-23 sec. 6.01, DCN 7). No amended returns are needed. Two exceptions: if you elected out of bonus depreciation for that class of property in the year you placed it in service, Form 3115 cannot undo the election; and for property placed in service last year, your CPA may amend that return instead.

Only if the loss is non-passive. That takes real estate professional status (750 hours and more than half your working time in real estate, plus material participation), or a short-term rental with an average stay of 7 days or less in which you materially participate. A rental with an average stay of 30 days or less also counts if you provide significant personal services, such as daily cleaning or meals. Without any of these, a long-term rental loss is passive: you can use up to $25,000 if you actively participate and your modified AGI is under $100,000, phasing out completely at $150,000, and the rest carries forward. Married filing separately, the allowance is $0 if you lived with your spouse at any time in the year, or $12,500 phasing out between $50,000 and $75,000 if you lived apart all year; the calculator assumes $0. A short-term rental with a 7-day average stay is not a rental activity, so it never gets the $25,000 allowance. The calculator applies these rules.

Largely, yes. Depreciation on 5- and 7-year property is recaptured at ordinary income rates when you sell. Bonus depreciation on 15-year land improvements counts as accelerated depreciation, so the part above straight line is also taxed at ordinary rates (IRC 1250 and Treas. Reg. 1.168(k)-2(g)(3)). Depreciation on the building is taxed at up to 25%. A cost segregation study mostly moves deductions earlier, which is worth money because of the time value and the rate difference, and a 1031 exchange or holding until death can defer or erase the recapture.

Usually 39. A unit in a building where more than half the units are used on a transient basis is not a dwelling unit (IRC 168(e)(2)(A)(ii)); for a single short-term rental house, that is the whole house. Treasury regulations treat accommodations as transient when the rental period is normally less than 30 days (Treas. Reg. 1.48-1(h)(2)(ii), applied by analogy). This is a different rule from the 7-day average stay, which decides whether the loss is passive.

REPSLog does not qualify you, but it keeps the record you need. It counts your own hours against the 750-hour REPS test (your spouse's hours are logged but do not count toward your 750), offers a 500-hour material participation view that adds your spouse, and keeps each entry's property, category, receipts and photos. REPS also requires that more than half of your working time is in real estate, so your CPA will compare these hours with any other job. Whether you qualify is your CPA's call.

Yes. Mark each property as a long-term or short-term rental. Long-term rentals count toward your REPS goal and short-term rentals get their own 100-hour counter per property (or 500 if your CPA groups them), with a toggle between the two views in one account. Hour tracking is on every plan, including Free (1 property and 5 entries), on iPhone, Android and the web.

Yes. The Trusted Tax Experts section on the REPSLog dashboard lists real estate CPA firms and cost segregation providers, with their specialties, the services they offer and a Book a Meeting button. It is on every plan, including Free. The list is a starting point, not a recommendation for your situation.

A year of entries as PDF, Excel and CSV files, split into long-term and short-term rental files. Each row has the property, date, hours, description, who did the work and the category, and you can include your receipts and the date and time each entry was created and last edited, which shows the log was kept as you went.

New accounts are offered a 14-day free trial of Starter or Premium with full access; cancel before day 14 and you pay nothing. There is also a Free plan (5 entries and 1 property, and it never expires), Starter at $14.99 a month or $149.99 a year, and Premium at $19.99 a month or $199.99 a year, which adds voice logging, AI autofill, calendar and booking sync, reminders and team access.

No. It is a planning estimate for a conversation with your CPA and a cost segregation provider. It assumes the standard deduction, one property with no personal use, and that the excess business loss limit applies to this rental alone, and the reclassification percentages are typical starting points: your study sets the real numbers.