Cost segregation case study · Long-term rental
The Edwardian on Page
Purchase price
$1.65M
Depreciable basis
$1.07M
Year-one deduction
$341K
Where the cash went
$1.65M in, split into land and building
The property was bought for $1,650,000. Land never depreciates, so it's carved out first; the building basis becomes the depreciable pool the study then accelerates.
Where the $1.65M went
Every dollar in, by where it landed. Land never depreciates; the building basis is what the study accelerates.
$1.65Mtotal spend
Land (never depreciates)$577,500 · 35%
Building basis (from purchase)$1,072,500 · 65%
Building $1,072,500 = $1,072,500 depreciable basis.
Inside the study
What the engine found
The deterministic engine separated the $1,072,500 depreciable basis into IRS recovery classes, then the engineered review confirmed every component against the source documents.
Component allocation
$1,072,500 depreciable basis across MACRS recovery classes.
$1.07Mbasis
5-year personal property$235,950 · 22%
15-year land improvements$85,800 · 8%
27.5-year building shell$750,750 · 70%
Residential rental building $751KCarpet and flooring (non-pe… $47KWindow treatments $47KCabinetry (non-permanent) $47KAppliances $47KDecorative lighting $47KDriveway and walkways $29KLandscaping (depreciable) $29K
Year one, in dollars
Accelerated depreciation, taken in year one.
| Accelerated depreciation | $341,088 |
| Total year-one deduction | $341,088 |
| Straight-line without a study | ~$39,000/yr |
About 9× more deduction pulled into year one than straight-line.
Depreciation by year
Year-one spike from bonus depreciation, then the building shell.
| Year 1 | $341,088 |
| Year 2 | $27,300 |
| Year 3 | $27,300 |
| Year 4 | $27,300 |
| Year 5 | $27,300 |
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-2025-701D