Accelerated Depreciation
See how much depreciation you can reclassify from 27.5 or 39 years into faster MACRS recovery periods.
How MACRS Reclassification Works
A cost segregation study identifies building components that qualify for shorter depreciation lives under MACRS. Personal property like carpeting, appliances, cabinetry, and decorative fixtures move to a 5-year recovery period. Land improvements like parking lots, landscaping, sidewalks, and fencing move to a 15-year recovery period. The remaining structural components stay on the standard 27.5-year (residential) or 39-year (commercial) schedule.
- 5-year MACRS pool: carpeting, appliances, cabinetry, decorative lighting, window treatments
- 15-year MACRS pool: parking lots, landscaping, sidewalks, fencing, site utilities
- Remaining building: structural walls, roofing, foundation, HVAC ductwork, plumbing
- Typical studies reclassify 20-40% of building value into shorter-life pools
Why Front-Loading Depreciation Matters
By moving depreciation into the early years of ownership, you reduce your taxable income now when the time value of money works most in your favor. A dollar of tax savings today is worth more than the same dollar saved in year 20. This calculator shows the exact year-by-year comparison between standard straight-line and accelerated cost seg depreciation.
- Year 1 tax savings can offset the entire study cost within months
- Front-loaded depreciation improves early-year cash-on-cash returns
- NPV calculation accounts for time value of money on future savings
Sample Output
See what this feature calculates for you.
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