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Cost segregation for apartment complex properties

Cost-seg feasibility for apartment complex properties under OBBBA-current 100% bonus depreciation. With a worked $3M 12-unit MFR example.

How the engine allocates basis for apartment complex properties

The TaxProtestTx feasibility estimator uses IRS-Audit-Techniques-Guide-calibrated base allocation percentages by property type. For apartment complex properties the starting point is:

5-year personal property base 13.0%
7-year personal property base 1.0%
15-year land improvements base 9.0%
Building shell (27.5-yr) 77.0%

Feature adjustments — pool, custom kitchen, extensive landscaping, large lot, fence length, etc. — push the 5-year and 15-year buckets up from these baselines, capped at a combined 50% of basis (the engineering-firm outer bound for residential/small commercial under the IRS ATG).

Worked example — $3M 12-unit MFR

Sample property purchased in 2026 (post-OBBBA, 100% bonus), with a 37% federal marginal bracket and real-estate-professional status:

Purchase price $3,000,000
Land allocation $600,000
Depreciable basis $2,400,000
Total reclassified 24.0%
Year-1 deduction (cost-seg) $611,927
Year-1 deduction (standard) $47,273
Estimated Year-1 federal tax effect ~$226,413
Threshold label Above threshold

The screening label is a calibration around the typical $5,000 floor at which property owners commonly evaluate commissioning a full engineering study.

Run the numbers on your specific property

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Open the calculator with these values prefilled

Sources

IRC §168(k) as amended by OBBBA §70301
IRS Cost Segregation Audit Techniques Guide, Chapter 7
IRS Publication 946, Tables A-1 through A-6
IRS Notice 2026-11

Related

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