Cost Segregation Calculator

This calculator provides both a quick screening estimate and a more detailed allocation-based estimate of accelerated depreciation and first-year federal tax savings from cost segregation. It is intended to help owners and advisors identify whether a full cost segregation study may be worthwhile.

Estimates depend on user inputs and simplified assumptions. A professional cost segregation study using engineering-based component analysis and asset-level inspection will produce materially different, higher-confidence results. Use these outputs for planning and preliminary analysis only.

Updated Nov 10, 2025

Calculation method

Allocates personal property into 5-, 7-, and 15-year categories with optional custom allocation percentages. Applies bonus depreciation to the total personal property allocation and computes a conservative first-year approximation plus comparison to straight-line building depreciation.

Inputs

Total acquisition or placed-in-service cost (including eligible improvements)

Min 0

Estimated land value (non-depreciable)

Min 0

Other non-depreciable costs (e.g., certain fees)

Min 0

Qualified improvement/addition costs (if not in purchase price)

Min 0

Estimated percent of building basis allocable to personal property

Min 0 · Max 100

Building type (affects straight-line life)Marginal federal tax rate (%) to estimate cash tax benefit

Min 0 · Max 100

Bonus depreciation election (%) applied to eligible property

Min 0 · Max 100

Use custom allocation percentages across 5/7/15-year property?

Advanced inputs

Custom allocation percentages

Percent allocated to 5-year property

Min 0 · Max 100

Percent allocated to 7-year property

Min 0 · Max 100

Percent allocated to 15-year property

Min 0 · Max 100

Results

Updates as you type

Allocated to 5-year property

$48,000.00

Allocated to 7-year property

$36,000.00

Allocated to 15-year property

$36,000.00

Estimated first-year depreciation (personal property + bonus approximation)

$120,000.00

Additional depreciation vs building straight-line — first year

$99,487.18

Estimated federal tax savings — first year

$28,800.00

Tax savings attributable to additional depreciation (first year)

$23,876.92

Output	Value	Unit
Allocated to 5-year property	$48,000.00	USD
Allocated to 7-year property	$36,000.00	USD
Allocated to 15-year property	$36,000.00	USD
Estimated first-year depreciation (personal property + bonus approximation)	$120,000.00	USD
Additional depreciation vs building straight-line — first year	$99,487.18	USD
Estimated federal tax savings — first year	$28,800.00	USD
Tax savings attributable to additional depreciation (first year)	$23,876.92	USD

Primary result$48,000.00

Visualization

Points

Methodology

Quick estimate: applies a single user-supplied percentage of the allocable building basis to personal property, assumes a 5-year MACRS class life for the majority of personal property, and applies the elected bonus depreciation percentage. This is a conservative screening approach.

Detailed estimate: divides the personal property basis into 5-, 7-, and 15-year pools using default or custom percentages, applies bonus depreciation to eligible property, and compares an approximate first-year accelerated amount to straight-line building depreciation. Formulas are simplified approximations to aid decision-making, not a substitute for a full study.

This tool follows sound engineering and tax practice principles for approximation and cites relevant regulatory and standards authorities for controls, data handling, and professional practice. It is not tax advice; consult a qualified CPA or cost segregation specialist for site-specific analysis.

Worked examples

Example: $1,000,000 purchase, $200,000 land, 15% personal property, 100% bonus, 24% tax rate. Personal property basis = $120,000. Bonus = $120,000. First-year depreciation approx = $120,000 + (0)/5 = $120,000. Estimated first-year federal tax savings ≈ $28,800.

Expert Q&A

Is this calculator a replacement for a professional cost segregation study?

No. This tool provides preliminary estimates and is not a substitute for a qualified cost segregation study that documents asset-by-asset allocations. Use it to screen opportunities and scope a study.

Which inputs most affect the results?

Allocable building basis (purchase price less land), the percent you allocate to personal property, the bonus depreciation election, and your marginal tax rate have the largest impact on first-year savings.

Are state tax rules included?

This calculator estimates federal first-year savings only. State rules vary and may limit or modify bonus depreciation and allocation treatment. Consult state guidance or a tax professional for state-level effects.

What accuracy should I expect?

Expect screening-level accuracy. Actual study results depend on engineering-level asset identification and local cost databases. Use this tool for planning; obtain a formal study for tax filings.

Sources & citations

IRS — Publication 946, How To Depreciate Property — https://www.irs.gov/publications/p946
Internal Revenue Code — depreciation and bonus rules (consult current IRC sections) — https://www.irs.gov
NIST — Frameworks and guidance for trustworthy systems and data handling — https://www.nist.gov
ISO — standards for quality management and professional practice — https://www.iso.org
OSHA — workplace safety guidance for site inspections — https://www.osha.gov
IEEE — recommended practices for measurement and uncertainty — https://www.ieee.org