CalculateRealEstateROI

Taxes

When is a cost segregation study worth it?

When property basis > $400k and you can use the deductions (high income or REPS).

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

When property basis > $400k and you can use the deductions (high income or REPS).

Expanded explanation

Cost seg typically costs $4–10k. Generates $30–100k in year-1 deductions on $500k+ properties. Need either REPS, STR loophole, or material passive income to monetize.

Examples

  • $700k property → $200k accelerated → $60k year-1 deduction at 35% = $21k tax savings.

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