Cost Segregation Calculator

Background.

Cost Segregation Calculator is a checking tool for people trying to compare first-year depreciation from an entered shorter-life allocation with a baseline building rate. A cost segregation study reclassifies qualifying building components into shorter recovery classes; it does not create extra basis. That definition leads directly to the displayed relationship: “first-year depreciation = shorter-life basis × entered rate + building basis × entered rate; acceleration is the difference from the entered baseline.”

The editable entries are basis assigned to shorter-life property, entered first-year rate for shorter-life property, remaining depreciable building basis, entered first-year building rate, baseline first-year rate without segregation. Use values from the document or measurement that governs this cost segregation question; the defaults are only the worked fixture below. The main trap is specific to cost segregation: engineering classification, land exclusion, placed-in-service date, conventions and recapture are not determined by this allocation model.

IRS Publication 946, How To Depreciate Property; MACRS, section 179 and additional first-year depreciation documents the convention or governing rule used here. The cost segregation output is a transparent scenario under those facts: it does not manufacture an unentered market price, professional determination, carrier quote, legal eligibility finding or locally adopted code value.

What is cost segregation calculator?

Cost Segregation is the relationship behind this decision: a cost segregation study reclassifies qualifying building components into shorter recovery classes; it does not create extra basis. On this page it means first-year depreciation = shorter-life basis × entered rate + building basis × entered rate; acceleration is the difference from the entered baseline. Engineering classification, land exclusion, placed-in-service date, conventions and recapture are not determined by this allocation model; that is the line between the reported quantity and a broader real estate analysis.

How to use this calculator.

1. 01Confirm that “first-year depreciation = shorter-life basis × entered rate + building basis × entered rate; acceleration is the difference from the entered baseline” matches the cost segregation convention you need.
2. 02Replace the fixture values for basis assigned to shorter-life property, entered first-year rate for shorter-life property, remaining depreciable building basis, entered first-year building rate, baseline first-year rate without segregation with dated values from the governing record.
3. 03Keep all currencies, measurement units and time periods on the same basis before calculating.
4. 04Read first-year depreciation under entered allocations together with this boundary: Engineering classification, land exclusion, placed-in-service date, conventions and recapture are not determined by this allocation model.

The formula.

The calculation uses first-year depreciation = shorter-life basis × entered rate + building basis × entered rate; acceleration is the difference from the entered baseline. In this cost segregation model, the entered terms are basis assigned to shorter-life property, entered first-year rate for shorter-life property, remaining depreciable building basis, entered first-year building rate, baseline first-year rate without segregation. A cost segregation study reclassifies qualifying building components into shorter recovery classes; it does not create extra basis, which is why the relationship is presented under this name rather than as a universal alternative. Engineering classification, land exclusion, placed-in-service date, conventions and recapture are not determined by this allocation model. Calculations keep full decimal precision through the relationship and round only the returned display values.

A worked example.

Frequently asked questions.

References& sources.

1. [1]IRS Publication 946, How To Depreciate Property; MACRS, section 179 and additional first-year depreciation. Retrieved 2026-08-07. access: open unless marked otherwise.
2. [2]U.S. Internal Revenue Service. About Form 4562, Depreciation and Amortization. Retrieved 2026-08-07. independence: primary; access: open.
3. [3]U.S. Internal Revenue Service. Topic no. 704, Depreciation. Retrieved 2026-08-07. independence: primary; access: open.