---
title: Cost Segregation Calculator
updated: '2026-07-03T08:00:00Z'
description: >-
  Estimate accelerated depreciation and potential federal tax impact from a cost
  segregation study for commercial and residential rental real estate.
canonical: 'https://www.havenstoneadvisory.com/resources/calculators/cost-segregation'
---

# Cost Segregation Calculator

This free calculator models how a cost segregation study could shift depreciation on a residential rental or commercial building into earlier years. Enter purchase price, land value, placed-in-service date, and improvement costs to see an estimated short-life allocation and an illustrative federal tax impact, then decide whether a property-specific study is worth pricing out.

## Cost Segregation: The Basics

Cost segregation can accelerate depreciation by reclassifying parts of a building into shorter-life asset classes. That can increase deductions earlier, especially when bonus depreciation is available.

- **What it does**: Splits depreciable basis into short-life property (often 5/7/15-year) + remaining building life (27.5/39-year).
- **When it tends to pencil**: Higher basis, meaningful improvements, higher tax rate, and/or bonus depreciation availability.
- **What matters for accuracy**: Land value, placed-in-service date, and renovation/improvement details are usually the biggest drivers.

## Important Note

This calculator estimates depreciation and an illustrative federal tax impact. It does not model passive loss limitations, REPS/STR grouping, AMT/NIIT, state rules, or elections. Use it to understand "order of magnitude," then validate with a property-specific review. Projections are planning tools, not guarantees. For the standards behind savings figures, read [how HavenStone thinks about tax savings](/tax-savings-methodology).

## FAQ

- **What is a cost segregation study?** A study that identifies building components that can be reclassified into shorter IRS recovery periods instead of depreciating everything as 27.5- or 39-year building.
- **Does cost segregation change total depreciation, or just timing?** Primarily a timing shift: you accelerate depreciation into earlier years, improving cash flow.
- **What properties are eligible?** Commonly used for residential rental (27.5-year) and commercial real estate (39-year).
- **How does bonus depreciation interact?** Bonus depreciation applies to eligible short-life components and can significantly increase year-one deductions.
- **Can I do cost segregation after I've owned the property for a while?** Often yes, via a "lookback" study and catch-up adjustment.
- **Will cost segregation increase audit risk?** A well-documented study prepared with appropriate methodology is designed to hold up under scrutiny.

## Build the Full Real-Estate Tax Picture

Cost segregation is only one part of the tax plan. Connect depreciation timing to entity planning, quarterly estimates, bookkeeping, and real-estate operations. For capital gains, basis step-up, and long-term planning around appreciated property, start with the [Wealth and Capital Gains Tax Strategy hub](/resources/topics/wealth-tax-strategy).

Use the interactive calculator at: https://www.havenstoneadvisory.com/resources/calculators/cost-segregation