Cost segregation isn't just for commercial buildings. Residential rental properties over $500K routinely generate $19K-$80K in first-year deductions.
Cost segregation works for residential rentals, Airbnb/STR properties, and multifamily buildings. If it's a rental generating income, it likely qualifies.
Studies start making sense at $250K-$500K. Technology-enabled studies start at $499-$2,500, making them accessible for smaller portfolios.
REPS is not required for cost segregation. But REPS + cost seg = maximum benefit for W-2 earners with rental properties.
Material participation in STR + cost segregation = massive Year 1 deduction that offsets W-2 income. This is real, legal, and widely used.
| Property Value | Estimated First-Year Savings |
|---|---|
| $250K | ~$19,800 |
| $500K | ~$31,700 |
| $750K | ~$59,400 |
| $1M | ~$79,200 |
| $2M | ~$158,400 |
Source: Overline IQ, 8,000+ studies, 37% tax bracket. Individual results vary based on property type, location, and tax situation.
The STR loophole: If you materially participate in managing your short-term rental, cost segregation losses can offset your W-2 income — not just passive rental income.
This is how physicians, attorneys, and tech executives offset $100K+ in W-2 tax obligations with rental property losses.
See what accelerated depreciation could mean for your portfolio.
Get Your Savings Estimate →Estimates are for illustrative purposes only and do not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.
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