There Was No Way to Know Your Bonus Depreciation Before Closing — So We Built One

The Year 1 bonus depreciation deduction on a typical short-term rental purchase ranges from $185,000 on a Pigeon Forge cabin to $620,000+ on a Park City ski home. At a 37% federal bracket, that translates to $68,500-$230,000 in federal tax savings — often as large as the down payment itself. For the full ranking of 197 US STR markets by bonus depreciation potential, see our 2026 STR Bonus Depreciation Market Study.

And yet, until recently, there was no way for an investor to know that number before closing.

The reason is structural. The discipline that produces the number — engineered cost segregation — is a $5,000-$15,000 service performed by specialty engineering firms over a 6-8 week timeline. It happens after closing because that's when the cost basis is locked, the property is accessible, and the investor has the tax basis to defend. By the time the number lands, the offer has been made, the price has been set, the property is owned, and the deduction is whatever it is.

For investors who screen ten properties for every one they close on, this is structurally backwards. The largest variable in the actual return calculation is unknown at the moment of decision-making. Investors write offers based on cap rates, comps, and rental projections — none of which capture the $200,000-$600,000 federal tax line item that often dwarfs the first three years of net cash flow combined.

DepreciMax was built to fix this. We moved bonus depreciation analysis from a post-closing $5,000 study to a pre-offer $99 AI report — closely calibrated to formal study's bonus-eligible % output, and structured around how STR investors actually make purchase decisions.

The broken status quo

Walk through a typical STR investor's purchase process today:

1. Search. Browse Realtor.com, Zillow, off-market lists, agent recommendations. Maybe 20-50 candidates per month for an active investor.
2. Underwrite. Build a pro forma using nightly rate estimates from AirDNA or Rabbu, expense assumptions, and cap rate targets. Typically excludes any specific bonus depreciation estimate — most investors plug in a generic 18-22% Year 1 deduction or skip the line item entirely because they don't know.
3. Offer. Make the offer based on the underwriting — without knowing whether the property will produce $200k or $600k of Year 1 deduction.
4. Close. Take ownership. Hire a property manager (or self-manage). Begin operations.
5. Cost segregation study. 4-12 weeks after closing, commission a formal cost segregation study from KBKG, Engineered Tax Services, Capstan Tax, or similar. Cost: $5,000-$15,000. Timeline: 6-8 weeks. Output: a defensible IRS-ready report with line-item classification of every component of the property into 5-year, 15-year, and 39-year categories under §168(k).
6. File taxes. Apply the deduction. Discover what the actual Year 1 number was — typically 3-5 months after closing, sometimes longer.

The deduction shows up at step 5. The pricing decision happened at step 3. There is a structural information gap of two months and one closed transaction between them.

For a single property purchase, that gap might cost $50,000-$200,000 of theoretical offer leverage — money that could have been negotiated off the purchase price had the buyer known the deduction would be smaller than expected, or money that could have justified a higher offer had the buyer known the deduction would be larger. For an investor making 2-5 STR purchases per year, the gap compounds.

What DepreciMax does differently

The platform has two core features.

Pricing — and why we landed here

The three tiers serve different stages of the investor's process. Free calculators are useful for a sanity check on whether bonus depreciation matters at all (it does). Formal studies remain the gold standard for actual tax filing — DepreciMax is not a replacement at the filing stage. The gap that DepreciMax fills is the one between them: pre-offer screening at a price point that scales to evaluating dozens of deals per year. (For the deeper comparison, see Free Calculators vs. $99 AI Report vs. $5,000 Formal Study.)

For investors evaluating 5+ properties per year, the $149/mo DepreciMax membership unlocks unlimited reports — breaking even after roughly 6 reports versus the $99 per-report price. (For more detail on the membership economics, see Tax Savings Calculator Pricing.)

Who DepreciMax is for

Three audiences use the platform actively:

• STR investors with $500k-$3M property budgets. The primary use case. Investors evaluating multiple deals across multiple markets, who need to factor bonus depreciation into offer pricing, financing decisions, and W-2 tax planning. (For the strategic case behind why bonus depreciation matters at this income level, see Redirect Your W-2 Tax Bill Into an Appreciating Real Estate Asset.)
• CPAs and tax advisors with STR investor clients. Use DepreciMax estimates to brief clients before purchase, scope formal cost segregation studies post-purchase, and validate that the property qualifies for the deduction the client is anticipating. The $99 report is structured to be handed directly to a CPA without translation.
• STR-focused buyer's agents and brokers. Use DepreciMax to bring the bonus depreciation number to the buyer before the offer. In a market where every comparable agent shows the same Zillow listings, being the agent who produces a $400,000 Year 1 federal tax deduction estimate alongside the property pitch is a competitive advantage in the buyer-agent relationship.

What DepreciMax doesn't do

To be specific about boundaries:

• Not a replacement for a formal cost segregation study at filing. The DepreciMax report is calibrated for screening and pre-purchase decisions. The IRS-defensible engineered study still happens post-closing — DepreciMax is the analysis that makes the post-closing study worth the cost.
• Not tax advice. The platform produces estimates and classifications. Material participation, §469 STR qualification, §280A personal use limits, state addbacks, and audit defense all require a CPA familiar with STR tax strategy.
• Not a property manager or rental operator. DepreciMax handles the tax analysis side. STR operations — listing, pricing, hospitality, cleaning, guest management — are separate problems with separate tools.

Why it matters that this exists now

Bonus depreciation under §168(k) was reinstated at 100% for property placed in service in 2025 and beyond. The window where investors can deduct 100% of qualifying personal property and land improvements in Year 1 — instead of 80%, 60%, or 40% as it phased down between 2023 and 2026 — is now. For high-W-2 earners deploying capital into short-term rentals, the next 5-10 years represent the most favorable bonus depreciation environment in decades.

The investors who will benefit most are the ones who make the deduction visible at the offer stage rather than the filing stage. The platform exists to put that number in front of every investor, every CPA, and every broker working an STR deal — at a price point that scales to actual deal flow.

Related reading

• Free Cost Seg Calculators vs. $99 AI Report vs. $5,000 Formal Study — the head-to-head pricing and accuracy comparison.
• AI Cost Segregation vs. Traditional Study — the methodology comparison in depth.
• How to Use IRS §168(k) Before Closing — the pre-purchase workflow.
• Redirect Your W-2 Tax Bill Into an Appreciating Real Estate Asset — the strategic case for bonus depreciation at high W-2 brackets.
• The STR Loophole Explained — the foundational §168(k) and §469 mechanics.

Frequently asked questions

What is DepreciMax?

DepreciMax is a platform that lets short-term rental investors know the Year 1 bonus depreciation deduction on a property before they make an offer — instead of after they close. It has two core features: a market screening tool that ranks every active STR listing in any market by bonus depreciation potential, and a $99 AI property report that analyzes 7-9 listing photos and produces a line-item IRS §168(k) classification closely calibrated to a formal $5,000+ cost segregation study.

How does DepreciMax compare to a formal cost segregation study?

A formal cost segregation study, conducted by an engineering firm post-closing, costs $5,000-$15,000 and takes 6-8 weeks. DepreciMax produces a calibrated estimate pre-purchase from listing photos, in minutes, for $99. Calibration target is closely calibrated to formal-study output. The DepreciMax report is built for screening and offer-pricing decisions before closing — formal studies remain the gold standard for actual tax filing. Most sophisticated investors use DepreciMax to screen deals, then commission a formal study after closing to defend the deduction at filing.

Why does it matter to know bonus depreciation before closing?

The Year 1 §168(k) bonus depreciation deduction on a typical $1M-$2.5M short-term rental ranges from $200,000 to $620,000+. At a 37% federal tax bracket, that translates to $74,000-$230,000 in federal tax savings. That figure is often as large as the down payment itself. Going into an offer not knowing whether the property will produce $200,000 or $600,000 of Year 1 deduction means writing offers without one of the largest variables in the actual return calculation. DepreciMax moves that variable from the post-closing tax filing back to the pre-offer screening stage — where it can affect which properties get offered on, and at what price.

Who uses DepreciMax?

Three audiences. First, STR investors with $500k-$3M property budgets who are actively evaluating multiple deals and need to factor bonus depreciation into pricing decisions. Second, CPAs and tax advisors with STR investor clients, who use DepreciMax estimates to brief clients before purchase and to scope formal cost segregation studies post-purchase. Third, STR-focused buyer's agents and brokers who use DepreciMax to bring the bonus depreciation number to the buyer before the offer — turning tax savings into a competitive advantage in negotiations.

How accurate is the $99 AI report compared to a $5,000 formal study?

DepreciMax is closely calibrated to formal cost segregation study output' bonus-eligible %. The benchmark property — a Ketchum, ID condo with a formal Madison SPECS study showing 18.9% bonus-eligible classification — produces a DepreciMax estimate of 22.9%, intentionally calibrated +4% optimistic of the formal study. The calibration is deliberate: an estimate that runs slightly optimistic gives investors better directional news while remaining within accuracy tolerance, and the formal post-closing study produces the final defensible number for IRS filing. The DepreciMax estimate is not a replacement for a formal study at filing — it is a pre-purchase screening number engineered to inform offer pricing.

Estimates are pre-purchase screening tools, not IRS-defensible engineered cost segregation studies. Actual deduction depends on property-specific factors including final cost basis, conveyed FF&E, jurisdiction, ownership structure, material participation, and §280A personal use treatment. State conformity to federal §168(k) varies — California, Vermont, New Jersey, and others require addbacks. This article is for educational purposes only and does not constitute tax or legal advice. Consult a qualified CPA familiar with the STR loophole and §168(k) before implementing any tax strategy.