Tax advantaged ownership
A deduction most real estate cannot offer.
How it works
An engineering-based cost segregation study is expected to reclassify roughly 30% of the depreciable basis into 5, 7, and 15 year property. Under current bonus depreciation rules, that portion can be deducted in the first year of ownership instead of over 27.5 years.
Short-term rentals that meet the IRS material participation test may qualify for an exception that allows these losses to offset W-2 and other active income.
A cost segregation vendor is already lined up for this property. No need to shop for one.
Timing
Close before December 31 and the year one deduction applies to your 2026 return.
Tax Advantage: Year One Estimate
Based on a $650,000 purchase price
- Purchase price
- $650,000
- Estimated land allocation
- $128,500
- Estimated depreciable basis
- $521,500
- Estimated year one depreciation with cost segregation
- $156,450
- Estimated year one tax savings (37% tax rate)
- $57,886.50
Pair two units as one 8-bedroom listing and base-case gross revenue rises to roughly $69,300 per unit.
This is not tax advice. Figures are estimates based on a 37% federal tax rate and a preliminary land allocation. Actual results depend on your individual tax position, final land allocation, and review by your tax advisor.
Request the cost segregation study