How to Use Our Cost Segregation Calculator

Step-by-step walkthrough of the TaxProtestTx cost-seg feasibility calculator. Six wizard steps, what to enter, and a deep-link example for a 2026 rental.

How to Use Our Cost Segregation Calculator

What you'll learn. A click-by-click walkthrough of the six-step feasibility wizard, what each field means, and how to use a deep-link to skip ahead with a pre-filled scenario.

Before you start: the three numbers you need

Have these on hand from your closing disclosure or county appraisal record. Everything else is optional.

1. 1. Purchase price. The total amount paid, including any seller credits absorbed into basis.
2. 2. Land value (or appraisal-district improvement value). Depreciation applies to the building, not the dirt.
3. 3. Acquisition year and month. Drives the IRC §168(k) bonus rate. The month also matters for the §168(d)(3) mid-quarter convention on October–December purchases and for the OBBBA bimodal 2025 rule.

The calculator runs entirely in the browser — no email gate, no upsell.

Step 1 — Eligibility check

Open /cost-seg/ and pick the property use:

• Long-term rental — leases of 30+ days, 27.5-year recovery.
• Short-term rental — Airbnb, VRBO, corporate stays under 30 days; 27.5-year recovery and unlocks the IRC §469(c)(2) 7-day average-rental carve-out from the passive activity rules.
• Mixed-use — partial owner occupancy, requires CPA review.
• Primary residence — flagged immediately; cost segregation does not apply to a personal home.

Then enter the purchase month, year, and price. If a prior cost-seg study exists on the property, the wizard recommends updating it rather than running a fresh one.

Step 2 — Property verification

Enter the property address. For Montgomery, Harris, Dallas, and Travis counties in Texas, the lookup button pre-fills:

• Square footage and year built
• Lot acres
• County-appraised value
• Land value and improvement value (if available from the appraisal district)

Outside those four counties, the property owner enters the data manually. A county-sourced land number is cleaner than a guess; everything is overridable.

Step 3 — Interior details

Walk the kitchen, flooring, bathroom, lighting, window-treatment, and other-interior checklists. Each box maps to a percentage adjustment in a specific MACRS class — 5-year for personal property like cabinets and fixtures.

Two pitfalls to avoid:

• Don't double-count finish level. If you mark "high-end finish," the engine automatically scales per-item bumps (custom cabinets, granite, glass shower, gas fireplace, etc.) down to 30% of their table value. This avoids inflating the same upgrade twice.
• Recessed lighting and ceiling fans take a quantity input. Enter the actual count — the engine scales linearly up to a cap.

Step 4 — Exterior details

Pool, patio, deck, pergola, landscaping extent (small / professional / extensive), fencing type and length, driveway type and length, detached structures (garage, shed, barn) and their square footage, and lot acres.

These items mostly map to the 15-year land-improvements class. Lot size matters: a lot above half an acre triggers an additional small adjustment to reflect more landscaping and hardscape.

Step 5 — Renovations (optional)

If the property has been renovated since acquisition, list the renovations. The screening doesn't price the renovation separately — that's an engineering-study task — but it does flag whether a partial-asset disposition or renovation-specific reclassification is worth a CPA conversation.

Step 6 — Estimate inputs

Two questions in this step matter most:

• Federal tax bracket. Converts the deduction into a dollar tax effect. If unsure, the default is 32%.
• Real-estate-professional status (REPS). Under IRC §469(c)(7), both prongs must be met: 750+ hours per year in real-property trades and more than half of all personal services in real-property trades. The questionnaire collects each prong separately. "Not sure" is a valid answer — the result page surfaces both the gross deduction and the gated cash-impact figure so the property owner can see both numbers.

Click Generate Estimate. The results page renders in under a second.

Deep-link to a pre-filled scenario

The calculator accepts query-string parameters so you can share a configured starting point. Two examples:

• 2026 long-term rental, default everything else: /cost-seg/?purchase_year=2026&property_use=long-term-rental
• 2024 acquisition for a §481(a) look-back: /cost-seg/?purchase_year=2024&lookback=true

Useful for sending a configured scenario to a CPA or co-investor without dictating the rest of the inputs.

What the result page produces

Four headline numbers, an asset-breakdown table, the list of feature adjustments applied, a 10-year depreciation comparison, plus three guard-rail callouts where they apply: the §469 passive-activity-loss gate, the §1245 recapture warning, and (for prior-year acquisitions) a §481(a) catch-up line.

The dedicated reading-your-feasibility-estimate tutorial walks through every section of the result page in detail.

Sources

• IRC §168(k) — Bonus depreciation, as amended by OBBBA §70301 (Pub. L. 119-21, signed July 4, 2025)
• IRS Notice 2026-11 — bimodal 2025 acquisition guidance
• IRS Publication 946 — How to Depreciate Property
• IRC §469(c)(7) — Real-estate-professional status; §469(c)(2) — short-term-rental carve-out

Disclaimer. This tutorial describes general federal tax concepts. TaxProtestTx (Nought Labs LLC) is a feasibility-screening tool, not tax advice or a cost segregation study. Calculator output cannot be relied on under Treasury Circular 230. Consult a qualified CPA, EA, or attorney before filing. Results are not guaranteed.