Cost segregation case study · Multifamily
Edgewood Court
Purchase price
$2.4M
Depreciable basis
$1.97M
Year-one deduction
$761K
Where the cash went
$2.4M in, split into land and building
The property was bought for $2,400,000. Land never depreciates, so it's carved out first; the building basis becomes the depreciable pool the study then accelerates.
Where the $2.4M went
Every dollar in, by where it landed. Land never depreciates; the building basis is what the study accelerates.
$2.4Mtotal spend
Land (never depreciates)$432,000 · 18%
Building basis (from purchase)$1,968,000 · 82%
Building $1,968,000 = $1,968,000 depreciable basis.
Inside the study
What the engine found
The deterministic engine separated the $1,968,000 depreciable basis into IRS recovery classes, then the engineered review confirmed every component against the source documents.
Component allocation
$1,968,000 depreciable basis across MACRS recovery classes.
$1.97Mbasis
5-year personal property$590,400 · 30%
15-year land improvements$157,440 · 8%
27.5-year building shell$1,220,160 · 62%
Residential rental building $1.22MCarpet and flooring (non-pe… $84KWindow treatments $84KCabinetry (non-permanent) $84KAppliances $84KDecorative lighting $84KCommon-area HVAC (independe… $84KCommon-area fixtures $84K
Year one, in dollars
Accelerated depreciation, taken in year one.
| Accelerated depreciation | $760,781 |
| Total year-one deduction | $760,781 |
| Straight-line without a study | ~$71,564/yr |
About 11× more deduction pulled into year one than straight-line.
Depreciation by year
Year-one spike from bonus depreciation, then the building shell.
| Year 1 | $760,781 |
| Year 2 | $44,369 |
| Year 3 | $44,369 |
| Year 4 | $44,369 |
| Year 5 | $44,369 |
Method. Allocations follow the IRS Cost Segregation Audit Techniques Guide, Rev. Proc. 87-56, and MACRS (Pub. 946), with the 100% bonus rate (placed in service 2025) applied to qualifying 5- and 15-year property. The engine produces the figures deterministically; AI is used only to sort and extract from uploaded documents. Every line cleared the engineered review.
Run on Unlevered · engineered review · ULV-2025-7047