Your ROI multiple depends on your marginal bracket, the % of basis reclassified, your hold horizon, and whether bonus depreciation applies in your placed-in-service year. This page walks through each lever live so you can see where the multiple comes from on your property.
The calculator returns your ROI multiple in real time. Toggle each lever to see how bracket, reclass %, hold horizon, and bonus depreciation year change the multiple on your specific property.
On a $500,000 short-term rental, land typically runs ~20% of the purchase price and isn't depreciable. The headline math on this page uses purchase price directly for clarity; the methodology page shows the land-net version.
→ IRS Pub 946 §1, "Property You Can Depreciate"
A cost seg study moves components — appliances, flooring, site improvements — from a 27.5-year bucket into 5, 7, and 15-year buckets. For an STR, that's typically ~30% of basis. Office? 29%. Medical? 33%. Industrial? 20%.
→ Rev. Proc. 87-56, Asset Class Lives
100% bonus depreciation means every dollar reclassified into a sub-20-year life gets deducted in Year 1. For 2024 acquisitions it was 60%; for 2023, 80%. If you bought in 2025 or later, you're looking at the most aggressive Year-1 deduction the tax code has offered in a decade.
→ IRC §168(k), per OBBBA 2025
A $120,000 deduction in the 32% bracket is $38,400 of actual cash you don't pay the IRS. In the 24% bracket: $28,800. In 37%: $44,400. Add state on top — California's 13.3% turns a $120K deduction into another $15,960 of savings.
→ Rev. Proc. 2025-32, 2026 tax brackets
Most calculators only ever show you the good case. Here are the four shapes where a study underperforms, or shouldn't be ordered at all.
Full methodology + caveatsIf you're not a real estate professional and your rental isn't an STR with material participation, your Year-1 paper loss is suspended under §469. The deduction doesn't disappear — it carries forward to a year you have passive income or sell. Your true Year-1 cash benefit may be $0.
Depreciation recapture at ordinary rates can claw back the bulk of the Year-1 savings on exit. The math still tends to win, but the multiple drops sharply. The next-step calculator on costsegsmart.com models recapture properly.
At 12%, a $150,000 deduction is $18,000 in cash. The study still beats its fee by ~20×, but a study costing $1,495+ on a $1.2M property in the 12% bracket is probably an over-investment vs. a basic 1245-asset schedule from your CPA.
Lookback via Form 3115 still works, but the math gets thinner as the unrecognized depreciation tail shrinks. Properties acquired pre-2018 have the lowest typical ROI of any cohort we see.
Provider quality matters most in the marginal cases above — depreciation recapture modeling, §481(a) lookback, and audit-defense scope are where studies diverge. Compare cost segregation firms on disclosed methodology and audit defense before ordering.
The calculator inputs carry into your study order. If your finished study doesn't produce more deductible depreciation than the fee, we refund the fee.
Order your real study at costsegsmart.com