Cost Segregation Bonus Depreciation 2027 Calculator
Calculate first-year depreciation deduction from a cost segregation study with 2027 bonus depreciation at 40%. Estimates federal tax savings for real estate investors.
| 5-Year Bucket × Bonus % | — |
| 7-Year Bucket × Bonus % | — |
| 15-Year Bucket × Bonus % | — |
| 39-Year Year 1 MACRS (≈2.46%) | — |
| Remainder MACRS 5/7/15-Yr (post-bonus, Year 1) | — |
| Total Year 1 Depreciation | — |
| Year 1 Federal+State Tax Savings | — |
| Study ROI (Savings ÷ Fee) | — |
Cost segregation breaks a building into 5-year (personal property), 7-year (land improvements), 15-year (site improvements), and 39-year (structure) components. 2027 bonus depreciation is 40% (phasing down from 100% in 2022). Investors can immediately expense 40% of the 5/7/15-year buckets in Year 1, plus normal MACRS on the rest. Source: TCJA §168(k) phase-down schedule, IRS Form 4562.
How Cost Segregation Works in 2027
A cost segregation study uses engineering analysis to reclassify components of a building from 39-year (commercial) or 27.5-year (residential) depreciation into shorter 5/7/15-year buckets. Carpet, cabinets, decorative lighting, parking lot striping, landscaping, and site improvements all qualify for accelerated depreciation. The study identifies these components by walking the property and reviewing construction documents.
2027 Bonus Depreciation Phase-Down
TCJA §168(k) phased bonus depreciation: 100% (2017-22), 80% (2023), 60% (2024), 40% (2025-26), 20% (2027), 0% (2028+) unless Congress extends. Bonus applies to assets with class life under 20 years (i.e., 5/7/15-year buckets). 2027 rate of 40% still meaningful — a $1M building with 25% short-life allocation = $100k immediate write-off. As of 2026, OBBB extension proposals are pending.
Active vs Passive — Who Can Use the Loss
Cost seg + bonus depreciation often creates a paper loss. Most landlords face the §469 passive activity loss rules — losses only offset passive income. Three workarounds: (1) Real Estate Professional Status (REPS) — 750+ hours, more than 50% of work time. (2) Short-Term Rental loophole — average stay under 7 days + material participation. (3) Generate passive income from other rentals/syndications to absorb the loss.
Last updated May 2026. Sources: IRS Pub 946 (How to Depreciate Property), IRC §168(k) Bonus Depreciation.