Cost segregation Excel template — free download (2026).

What's in the template

Three sheets. Sheet 1 — Property inputs: purchase price, land value (or auto-derived from tax assessor ratio), year acquired, property type (single-family, short-term rental, duplex, multifamily 2–4 unit, multifamily 5+ unit, office, retail, restaurant, industrial, medical office, mixed-use), square footage, and your marginal federal tax bracket. Sheet 2 — MACRS component classification: pre-populated rows for the standard reclassifiable component categories — appliances and personal property (5-year), removable carpeting and decorative lighting (5-year), cabinetry and built-ins (5–7-year depending on attachment), site improvements like driveways, fencing, landscaping, exterior lighting (15-year land improvements per 26 U.S.C. § 168), and the remaining real-property structure (27.5-year residential / 39-year commercial). Default reclassification percentages by property type (18% for unfurnished SFR, 28% for furnished STR, 22% for multifamily, 33% for restaurant — sourced from Cost Seg Smart's 2026 benchmark dataset) are inputs you can override. Sheet 3 — Year-1 deduction summary: applies 100% bonus depreciation under IRC §168(k) (permanently restored for 2025+ property under OBBBA) to the bonus-eligible categories and outputs total Year-1 deduction and estimated federal tax savings at the entered bracket.

How accurate is it

For residential and small-commercial properties the template's default reclassification percentages — calibrated against our 2026 benchmark dataset of 412 engineered studies — produce a Year-1 deduction within 15–20% of an engineered study from the same provider. The template understates the deduction for properties with higher-than-typical FF&E density (luxury STRs, restaurants, medical office) and overstates for budget unfurnished long-term rentals with minimal land improvements. The systematic understatement on the FF&E side is the bigger error, because that's where the IRS expects the most rigor and where engineered analysis adds the most reclassified basis. For a $1M furnished short-term rental, the template might output a $260K Year-1 deduction while an engineered study finds $300K–$330K — material difference. The free online calculator uses the same defaults the template starts from, which is why this template is best for understanding the methodology and modeling §481(a) catch-up scenarios, not for filing.

Why the IRS expects more than an Excel sheet

The IRS Cost Segregation Audit Techniques Guide (Pub 5653) lists 13 quality elements for a defensible study: documented methodology, component-level cost basis citations to an industry-standard calibrated cost source, MACRS classification per Rev. Proc. 87-56, reconciliation of component costs to purchase price, engineer or qualified professional attestation, sources for any indirect costs, treatment of land and land improvements, and observation methodology (site visit, satellite imagery, county assessor records, or other documented sources). An Excel template covers the arithmetic — the multiplication of percentages and the application of §168(k) bonus — but not the documentation. At examination, a Form 4562 filed against a template without engineering backup typically faces full disallowance of the accelerated portion, with the taxpayer required to reconstruct the depreciation schedule using straight-line. That's why every credible cost-seg firm runs an engineered process, regardless of price tier — see the firm-by-firm comparison.

When the template is genuinely useful

• Pre-purchase modeling. Will a study pencil on this property? Plug in the purchase price, property type, and your bracket. If the modeled Year-1 deduction exceeds 4× the engineered study fee, it pencils. (For a $500K unfurnished SFR at a 32% bracket: ~$32K modeled deduction × 32% = $10K tax savings vs. a $495 study fee. Clear yes.)
• §481(a) catch-up sizing. If you've owned a property for 2+ years and took straight-line depreciation, the template estimates the missed bonus depreciation you can claim in the current year via Form 3115 §481(a) adjustment — no amended returns required.
• CPA conversation prep. Walk your CPA through the categories and percentages before paying for a study. The template's Sheet 2 is the conversation your CPA would have with an engineer in plain numbers.
• Methodology learning. Best way to understand what an engineered study actually does, without paying $495–$15,000 to find out.

When you've outgrown the template

As soon as you intend to claim the accelerated depreciation on a return. The IRS expects engineering-grade documentation traceable to a calibrated cost source (industry-standard construction-cost reference data), MACRS classification per Rev. Proc. 87-56, and a defensible methodology section. An automated engineered study from Cost Seg Smart (from $495 residential, from $1,995 commercial) uses the same template categories but adds internal technical review & QC, component-level cost-source citations, the Form 3115 §481(a) section for lookback, and the audit-support framework. Traditional firm pricing for the same defensible deliverable runs $5,000–$15,000 with a 4-to-8-week engagement. The template never replaces the study — it informs whether to order one.