Most investors take the same depreciation deduction every year for 27.5 or 39 years — and never find out how much more they could claim in Year 1. Enter your property details to see the real comparison.
Property Details
Land is never depreciable — only the building. Check your county property tax assessment for the assessor's land-vs-building split, or use 20% as a common starting estimate.
Cost segregation reclassification — editable
Tax Impact (optional)
This is YOUR estimate of your marginal federal + state rate, used only to translate the deduction into an approximate dollar impact. Lane Ledger doesn't determine your tax rate — your CPA does.
Year 1 Deduction
Without Cost Segregation
$0
Straight-line
With Cost Segregation
$0
Year 1, this property
⚖ Calculated using 100% bonus depreciation — current law under the One Big Beautiful Bill Act for property placed in service after Jan 19, 2025
Your 5-year and 15-year percentages add up to more than 100% of the building basis. Adjust so they total 100% or less.
How This Breaks Down
Component
Basis
Year 1 Deduction
10-Year Outlook
Important Considerations
⏱ This is a timing benefit, not extra savings
Cost segregation doesn't change how much you can deduct over the life of the property — it changes when. Every dollar accelerated into Year 1 is a dollar not deducted in a later year. Total depreciation over the property's life is identical either way.
🔑 Can you actually use this deduction?
A bigger deduction only helps if you can use it against your income this year. Rental losses are generally "passive" and can only offset passive income — unless you qualify as a Real Estate Professional, you actively participate with modified AGI under $100,000 (the $25,000 special allowance phases out between $100K–$150K MAGI), or — for short-term rentals — your average guest stay is 7 days or less and you materially participate, which can make STR losses non-passive and able to offset W-2 or other active income. This is one of the most valuable, most misunderstood rules in real estate tax.
🏠 Used property generally qualifies
Many investors assume bonus depreciation is only for new construction. It isn't. As long as the property is new to you — and you didn't buy it from a related party — used residential and commercial real estate generally qualifies for bonus depreciation on its reclassified components.
📋 This is a screening estimate, not a study
These numbers come from typical reclassification percentages for properties like yours — not an engineering analysis of your specific property. A formal cost segregation study from a qualified firm documents the actual basis allocation and is what supports these deductions if your return is examined.
↩ Recapture happens on sale
Accelerated depreciation isn't free — when you sell, the IRS recaptures it. The portion attributable to 5- and 15-year property is generally taxed as ordinary income up to your gain, while the building's depreciation is subject to unrecaptured Section 1250 gain, taxed at a maximum 25% federal rate. None of this is a reason to avoid cost segregation — it's part of the full picture worth modeling alongside your exit strategy.