Why This Tool Exists
Cost segregation is not a magic trick. It is an acceleration strategy with execution costs: study fees, documentation standards, and recapture awareness.
This calculator helps you estimate the first-year acceleration signal, then stress test the result under different assumptions so you do not talk yourself into a fantasy.
Cost Seg Payback (First-Year Signal)
Estimate first-year accelerated depreciation tax savings and stress test the assumptions.
| Scenario | Tax rate | Bonus | Est. tax savings | Net after fee |
|---|
What This Tool Is (And Is Not)
This is a planning model, not tax advice. It estimates a directional first-year benefit based on inputs you control.
The value comes from clarity: if small assumption changes flip the result, you should slow down and get a proper study and CPA review.
Inputs That Actually Move The Outcome
Your marginal tax rate (federal plus state) is the lever that converts depreciation into dollars.
The bonus depreciation percentage and the portion of basis reclassified into shorter-lived property are the acceleration engine.
Fees and process quality are the friction. If the packet is sloppy, you pay for a study and still cannot use it cleanly.
Execution Notes (Avoid The Obvious Mistakes)
Do not model a benefit you cannot actually use (limitations and passive rules matter).
Keep the study, allocation, and support in one folder and get advisor sign-off before filing.
If you are using this for STR decisions, pair the model with documentation and hours logs. Execution decides the outcome.
Documentation Checklist (Keep It Defensible)
- Create a one-page objective memo before you execute (what outcome you are trying to buy).
- Store your assumptions and calculations in a dated PDF (no year-end reconstructions).
- Keep evidence in the same folder structure every month (receipts, logs, approvals).
- Ask your CPA what would make this easy to sign off on, then build that packet.