Strategic partnership

DeductFlow R.E. Cost Seg $0 Maximized tax savings Illustrative year-one federal benefit on a $500K STR with material participation

For high-W2 earners, a cost segregation study is the single biggest tax lever a short-term rental delivers. DeductFlow unlocks it by capturing material-participation proof and tracking every other deduction for your property.

Your records: organized. Your deductions: maximized.

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Two products · One strategy

The deduction. The proof. Side by side.

R.E. Cost Seg performs professional, engineering-based cost segregation studies that accelerate depreciation and reduce your taxable income. DeductFlow turns the year into a CPA-ready package so those deductions hold up.

R.E. Cost Seg

Cost Segregation Calculator

Add your property details below to calculate potential accelerated depreciation expense utilizing a cost segregation study

123 Whitefish Way, Whitefish MT
$500,000
01/15/2026
Short-Term Rental ▾
37% ▾
Engineered estimator · 60 seconds · Free
CPA-ready tax package · Generated year-end
Run the Cost Seg Calculator DeductFlow: Start 7-day free trial
Free · 60 seconds · Powered by R.E. Cost Seg

Estimate the year-one savings on your property.

R.E. Cost Seg Calculator

What's your cost seg savings worth?

Click below to open the engineered calculator on R.E. Cost Seg's site. Going through our partner link gets you 10% off your first study — automatically applied at proposal.

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What happens next
01

Run your estimate

The R.E. Cost Seg calculator opens in a new tab. Enter your purchase price, basis, and a few details. Takes about 60 seconds.

02

Request a free proposal

If the math works for your property, R.E. Cost Seg will send you a proposal — with your 10 percent DeductFlow discount applied automatically.

03

Start DeductFlow

Start tracking active hours, organizing expenses and mileage, and producing a CPA-ready P&L — the proof side, captured daily.

R.E. Cost Seg track record

The engineering firm behind the calculator above.

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In tax savings delivered to investors
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Engineered studies completed
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Turnaround on residential studies
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U.S. states covered
Built for

Who this pair was made for.

First year

Just bought an STR

Your year-one tax window closes December 31. After that, you're leaving five figures on the table for the life of the asset.

Form 3115

Skipped cost seg in year one

Form 3115 lets you catch up every missed deduction in a single return — without amending prior years. The window doesn't close until you sell.

High earner

$300K+ W-2 income

The STR loophole is the only way the tax code lets you actively offset W-2 income. Cost seg is the lever. Material participation is the key.

Portfolio

Running a mixed portfolio

Cost seg accelerates depreciation on both short-term and long-term rentals. DeductFlow keeps every receipt, mile, and hour tied to the right entity.

Sound like you?

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Frequently asked

Questions we get most.

What is cost segregation for a short-term rental?
Cost segregation is an engineering-based study that reclassifies components of a rental property — flooring, fixtures, appliances, landscaping, driveways — from the standard 27.5- or 39-year depreciation schedule into shorter 5-, 7-, and 15-year buckets. The shorter buckets are eligible for bonus depreciation, which can generate large paper losses in year one. For a short-term rental owner who materially participates, those losses can offset W-2 or active business income under the STR exception to IRC §469.
How much can cost segregation save on a $500K Airbnb?
On a $500,000 short-term rental with $400,000 of depreciable basis, a typical study reclassifies 20–30% of the basis into shorter depreciation lives. That's $80,000–$120,000 of accelerated deductions in year one. For an owner in the 32% federal bracket who materially participates, the federal tax benefit is roughly $25,600–$38,400 before state savings. The worked example tab above walks through the full math.
Why does cost segregation require material participation to work?
Cost segregation accelerates depreciation. But under IRC §469, rental losses are passive by default and can only offset passive income. The STR exception under Reg. §1.469-1T(e)(3)(ii)(A) treats short-term rentals as non-passive when the owner materially participates — typically by spending more than 100 hours on the activity and more than any other individual. Without that proof, the accelerated depreciation deduction sits as a suspended loss until you sell.
What's the difference between a Rapid Report and a Fully Engineered Study?
The Rapid Report is a desk-based residential cost segregation study with a 5-business-day turnaround starting at $950, for properties under $800,000 depreciable basis. The Fully Engineered Study includes an on-site engineering visit, runs 4–6 weeks, starts at $2,500 residential or $3,325 commercial, and is used for larger residential, multifamily, and commercial buildings. Both are IRS-defensible.
What does DeductFlow do that a cost segregation study does not?
A cost segregation study creates one big deduction — the depreciation schedule. The IRS still expects substantiation of every other expense, mile, and active-participation hour throughout the year. DeductFlow is the daily-active organizer that captures all of it: expenses with photo receipts, mileage with route data, active hours with timestamps, and a CPA-ready P&L at year-end.
Is DeductFlow a tax advisor?
No. DeductFlow is a tax organization tool, not an advisor or filer. We capture the data, format it cleanly, and hand it to your CPA. Tax decisions are between you and your accountant.
References

The tax code and IRS guidance behind this page.

Tap a tab to explore

Everything you'd want to know — when you want to know it.

How does cost segregation accelerate depreciation?

A standard residential rental depreciates over 27.5 years. Commercial property depreciates over 39 years. Cost segregation reclassifies portions of the building into shorter recovery periods that qualify for bonus depreciation.

Standard residentialBuilding shell
27.5 years
Standard commercialOffice, retail
39 years
Land improvementsDriveway, landscaping
15 years
Specialty assetsFixtures, cabinetry
7 years
Personal propertyAppliances, flooring
5 years

The 5-, 7-, and 15-year buckets are eligible for bonus depreciation. Under the One Big Beautiful Bill Act (OBBBA), 100% bonus depreciation was restored for property placed in service on or after January 19, 2025. For a short-term rental owner who materially participates, the accelerated losses can offset W-2 or active business income under the STR exception in IRC §469.

Rapid Report vs Fully Engineered Study

R.E. Cost Seg offers two study types. Both are IRS-defensible. The differences come down to property complexity and on-site engineering.

Feature Rapid Report Fully Engineered Study
Designed forResidential STR / SFR under $800K basisLarger residential, multifamily, commercial
Turnaround5 business days4–6 weeks
Starting price$950$2,500 residential · $3,325 commercial
On-site engineering visitNo — desk-basedYes
IRS-defensibleYesYes
Typical % of basis reclassified20–25%25–30%
Form 3115 included if neededYesYes

Your CPA and R.E. Cost Seg's engineers can tell you which type fits your property. The calculator above produces a recommendation based on your inputs.

Key terms

Bonus depreciation
A first-year deduction for qualified property with a recovery period of 20 years or less. Under the One Big Beautiful Bill Act (OBBBA), 100% bonus was restored for property placed in service on or after January 19, 2025.
Material participation
An IRS standard under Reg. §1.469-5T. The most common test for STR owners: more than 100 hours of work on the activity in the year AND more than any other individual (including cleaners, managers, contractors).
STR exception
A carve-out from the passive activity rules under IRC §469. Properties with average guest stays of 7 days or fewer (or 30 days or fewer with substantial services) are not treated as passive rentals when the owner materially participates.
Cost basis
The amount you paid for a property plus closing costs and capital improvements, minus the land value. This is what gets depreciated.
Form 3115
The IRS Application for Change in Accounting Method. Required when you start cost segregation mid-life on an asset. Also lets you claim missed depreciation as a §481(a) adjustment in a single year.
Depreciation recapture
When you sell a depreciated property, the IRS recaptures previously claimed depreciation at up to 25% (§1250 property) or at ordinary income rates (§1245 property).
Rapid Report
R.E. Cost Seg's residential cost segregation study product. Five-business-day turnaround, $950 starting price, for properties under $800,000 depreciable basis.
Fully Engineered Study
R.E. Cost Seg's comprehensive study with on-site engineering visit. Required for commercial, multifamily, and larger residential properties. 4–6 week turnaround, $2,500+ residential / $3,325+ commercial.

DeductFlow unlocks every cost seg study. Start with the calculator.

Run the numbers. Then put DeductFlow to work — 7-day free trial, no credit card.

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