STR OWNER · BEACHFRONT, NORTH CAROLINA
$400K beachfront STR, single property, active host.
Inputs
- Purchase price
- $425,000
- Building basis (excl. land)
- $365,000
- Placed in service
- Q3 2025
- Material participation
- Yes (active host)
- State
- NC (partial conformity)
Result
- Y1 federal deduction
- $112,400
- Y1 NC state deduction
- $78,200
- Y1 federal tax shield @ 35%
- $39,340
- 10-year recapture exposure
- $26,800
The owner runs the snapshot on a Friday evening. The interview asks about average guest stay (under 7 days, qualifying), material participation (yes, the owner manages the property), and the placed-in-service date (which determines the OBBBA bonus rate). The estimate sharpens as inputs land: $112,400 in federal first-year deductions, $39,340 in tax shield. Worth running. Upgrade. The full report drops in the account that night with the federal schedule, the NC state schedule (NC has a partial-recognition addback), and the recapture exposure mapped through year 10. The owner forwards the PDF to their CPA Monday morning.
STR OWNER · 3-PROPERTY PORTFOLIO, MIXED MARKETS
Three Airbnbs across two states, $1.2M combined basis.
Inputs
- Properties
- 3 (TX, AZ, FL mix)
- Combined building basis
- $1,025,000
- Earliest placed in service
- 2023
- Latest placed in service
- Q1 2026
- Owner status
- Real estate professional
Result
- Y1 federal deduction (combined)
- $298,400
- §481(a) catch-up (older properties)
- $74,200
- Form 3115 included
- Yes (drafted)
- Cost (3 × $495)
- $1,485
The owner runs three back-to-back snapshots, one per property. The two older properties qualify for §481(a) catch-up — the cumulative depreciation that would have been taken under the reclassified asset lives is computed and lands as a deduction in the year of the change. Form 3115 ships drafted with each study. The newest property runs as a normal study. The owner pays $1,485 total — about a third of what one $5,000 traditional study would have cost — and walks away with three Cost Segregation Reports, a combined deduction footprint approaching $300K, and the audit-defensibility a CPA can review.
LTR OWNER · DUPLEX, OHIO, REAL ESTATE PROFESSIONAL
$300K duplex held five years, REPS-qualifying owner.
Inputs
- Property type
- Residential duplex
- Building basis
- $258,000
- Placed in service
- 2021
- §469(c)(7) REPS status
- Yes
- State
- OH (full conformity)
Result
- §481(a) catch-up deduction
- $48,400
- Going-forward Y1 acceleration
- $12,200
- Form 3115 included
- Yes (drafted)
- Federal tax shield @ 35%
- $21,210
The owner has held the duplex for five years and never ran cost seg. The property has been depreciating on the standard 27.5-year schedule the whole time. Running the study now triggers a §481(a) catch-up: the $48,400 of depreciation that would have been claimed under the reclassified asset lives lands as a deduction in the current year. Because the owner qualifies as a real estate professional, that deduction is non-passive — it offsets ordinary income, not just rental income. The Form 3115 ships drafted with the report.
LTR OWNER · SINGLE FAMILY RENTAL, FIRST PROPERTY
$250K single-family rental, first-time investor.
Inputs
- Property type
- Residential single-family
- Building basis
- $215,000
- Placed in service
- Q2 2025
- Owner status
- Hobbyist (W-2 + one rental)
- State
- GA (full conformity)
Result
- Y1 federal deduction
- $58,200
- Passive loss carryforward
- $48,000
- Federal tax shield (current year)
- $3,500
- Federal tax shield (cumulative)
- $20,400
The owner has a W-2 day job and bought their first single-family rental. Without REPS status, the §469 passive-loss limit applies — the cost-seg deductions can’t offset the W-2 income, but they fully offset the rental income (and accumulate as a passive-activity loss that releases on sale or against future rental income). The interview is explicit about this: the $58,200 deduction is real, it just expresses differently for this owner profile than for a real estate professional. The hobbyist sees the cumulative tax shield ($20,400 expected over the carryforward life) and decides $495 is worth it.
CPA · CLIENT PORTFOLIO REVIEW
CPA running studies for 8 STR-owning clients in one quarter.
Inputs
- Client base
- 8 STR owners, 12 properties
- CPA partner track
- White-label
- Average property basis
- $385,000
- Mix of new + look-back studies
- 5 / 7 split
Result
- Studies produced (in client-facing branding)
- 12
- Form 3115s drafted (look-back)
- 7
- CPA review hours per study
- ~30 min
- Partner revenue share earned
- Per agreement
A boutique CPA firm with several STR-owning clients had been turning down cost-seg recommendations because the third-party engineering quotes priced their clients out. Joining the partner program in white-label mode lets the firm run studies under its own brand at $495 client-facing pricing. The CPA reviews each report before signing — the format mirrors what a CPA expects to see, in the order they expect to see it — typically about thirty minutes per study. Across the quarter, the firm produced twelve studies, drafted seven Form 3115s for look-back §481(a) catch-ups, and earned the partner-tier revenue share on top of their regular tax-prep fees.
RECAPTURE · OWNER SELLING AFTER 7 YEARS
STR owner selling a $625K property held seven years.
Inputs
- Sale price
- $725,000
- Original building basis
- $525,000
- Cumulative depreciation taken
- $152,400
- Cost-seg study run in year 1
- Yes
- Years held
- 7
Result
- §1245 recapture (ordinary rates)
- $58,200
- §1250 unrecaptured gain (max 25%)
- $94,200
- State recapture (NC)
- $11,400
- Net after-tax proceeds
- $582,900
The owner is modeling a sale and realizes they don’t actually know what their after-tax proceeds will look like. The recapture schedule splits the math: the $58,200 §1245 portion (the personal-property pieces accelerated through cost seg) is taxed at ordinary rates; the $94,200 §1250 unrecaptured-gain portion is taxed at the 25% federal cap; NC layers another $11,400 on top. The net after-tax proceeds — $582,900 — is the deal-pencil number that actually matters. The owner pencils the deal a different way and decides to run a 1031 exchange instead, deferring the recapture into a replacement property.
