For Texas real estate investors, cost segregation is one of the most powerful tax strategies available. Our studies are engineered for accuracy and built for IRS compliance.
On a typical Texas property valued at $290,000, you could save up to $22,318 in Year 1 tax savings. 100% Bonus Depreciation – Permanently Restored.
See how much a cost segregation study could save you on a Texas investment property.
| Property Value | Est. Building Basis | Est. Accelerated Depreciation | Est. Year 1 Tax Savings |
|---|---|---|---|
| $290,000 | $232,000 | $60,320 | $22,318 |
| $435,000 | $348,000 | $90,480 | $33,478 |
| $580,000 | $464,000 | $120,640 | $44,637 |
*Estimates assume 20% land ratio, 30% reclassification rate, and 37% federal tax bracket. Actual results vary.
When Texas property owners need a cost segregation study, they need a team that specializes in their property type. We focus exclusively on smaller rental properties–giving us the expertise to maximize your savings.
For Texas property owners, a cost segregation study should deliver results you can trust. Our engineering team produces IRS-compliant reports backed by detailed documentation.
Cost segregation delivers measurable ROI for a range of Texas real estate investors.
Doctors, lawyers, and high-income professionals using real estate and cost segregation as a core tax planning strategy.
Retirees with rental property income who use cost segregation to reduce taxable income and preserve retirement savings.
Property owners selling on land contract who can accelerate remaining depreciation before transferring ownership.
State Income Tax Rate: No state income tax
Bonus Depreciation Conformity: Conforms to federal rules
Texas has no state income tax, so cost segregation benefits apply at the federal level only. However, Texas's high property tax rates make cost segregation's cash flow improvement especially valuable.
Texas's dynamic rental market–fueled by rapid population growth, business-friendly policies, and booming metros like Austin, Dallas, Houston, and San Antonio–offers exceptional opportunities for real estate investors. A cost segregation study can help Texas property owners accelerate depreciation on multifamily apartments, single-family rentals, and investment properties. SMF Cost Segregation Advisors provides engineering-based studies designed to maximize your tax savings in the Lone Star State.
In Texas, the most common candidates are single-family rentals, duplexes, triplexes, fourplexes, and small apartment buildings (1-10 units). Properties with extensive site improvements–such as parking lots, landscaping, fencing, and outdoor amenities–tend to yield the highest percentage of accelerated depreciation.
Yes, provided the depreciable building basis (purchase price minus land value) is at least $150,000-$200,000. With 100% bonus depreciation now permanent, the first-year tax savings on a single Texas property often exceed the study cost by 5-10x.
You'll need the property address, original purchase price or closing statement, the date it was placed in service as a rental, and any renovation invoices. Building plans are helpful but not required–our engineering team can work from a virtual walkthrough for Texas properties.
Federal cost segregation benefits are calculated at the federal level. However, Texas may or may not conform to federal bonus depreciation rules. In non-conforming states, you may need two depreciation schedules. Your CPA can determine Texas's current conformity status.
The tax savings are realized when you file your tax return for the year the study applies to. For look-back studies on older Texas properties, the catch-up deduction is claimed on the current year's return via Form 3115.
For Texas investors, the typical ROI ranges from 5x to 20x the cost of the study, depending on property value and type. A single-family rental with a $300,000 building basis might generate $20,000-$30,000 in first-year tax savings from a study costing $1,750-$2,750.
| City | Median Home Price | Est. Year 1 Savings |
|---|---|---|
| Austin | $520,000 | $46,176 |
| Plano | $440,000 | $39,072 |
| Dallas | $350,000 | $31,080 |
| Fort Worth | $320,000 | $28,416 |
| Irving | $320,000 | $28,416 |
| Houston | $310,000 | $27,528 |
| Arlington | $300,000 | $26,640 |
| San Antonio | $275,000 | $24,420 |