Federal 100% bonus rules and effective dates
CALIFORNIA TAX DIFFERENCES
Reviewed August 17, 2026 · Updated for current federal bonus-depreciation guidance
One study may feed two depreciation schedules.
A cost segregation study classifies the property’s components, but federal and California deductions do not always occur on the same timeline. California generally does not conform to federal bonus depreciation, so the state return commonly requires adjustments.
- ✓ No study work before payment
- ✓ CPA-ready final report
- ✓ California statewide
WHY IT MATTERS
Move eligible basis into faster recovery periods.
The same engineering allocation can still support both schedules. The CPA applies the appropriate recovery methods and state adjustments, tracks the basis differences and considers what happens when assets are disposed of or the property is sold.
Plain English: you are not creating a new deduction. You are identifying when supported pieces of the property may be depreciated.
WHAT WE REVIEW
Why the federal and state results differ
California nonconformity adjustments
Separate basis and accumulated depreciation
Federal and state placed-in-service schedules
Disposition and recapture tracking
Entity-level and owner-level tax treatment
SHOW ME THE NUMBERS
Illustrative schedule difference
Illustrative only. This assumes a 37% federal marginal rate where shown and that the owner can currently use the deduction.
- Property value
- $5,000,000
- Estimated depreciable basis
- $4,000,000
- Potential faster basis
- $600,000 to $1,200,000
- Potential upfront federal effect
- $222,000 to $444,000
- Study or comparison benchmark
- State result differs
This is a timing illustration, not guaranteed permanent tax savings. California commonly requires a separate depreciation schedule because it generally does not conform to federal bonus depreciation.
DOES IT FIT?
Strong candidates usually have four things.
✓
California return is required
✓
Federal bonus depreciation is claimed
✓
CPA maintains separate schedules
✓
Owner understands the benefit is timing
PORTFOLIO PRICING
More properties. Lower cost per study.
Order and pay for the properties together to receive a simple portfolio discount.
2 properties5% off3 to 4 properties10% off5+ properties15% off
STRAIGHT ANSWERS
Frequently asked questions.
Does California allow federal bonus depreciation?+
California generally does not conform to the federal bonus-depreciation rules, so state adjustments are commonly required. The exact treatment depends on the taxpayer and filing year.
Do I need two cost segregation studies?+
Usually not. One technical allocation can support the asset classes, while the CPA creates the separate federal and California depreciation schedules.
Is the free estimate a completed study?+
No. It is an illustrative screen using the facts you provide. No engineering takeoff, professional certification or tax opinion is included. Technical work begins only after a signed and paid engagement.
Does my CPA need to approve the study first?+
No. It is smart to ask whether you can currently use additional depreciation, but the paid study does not require advance CPA approval. Your CPA makes the final filing decision.
Do you guarantee tax savings?+
No. A study accelerates the timing of eligible depreciation. Results depend on basis, property facts, placed-in-service dates, passive-loss rules, tax rates and the owner's filing position.
AUTHORITATIVE SOURCES
Reviewed against current IRS and California guidance.
Last reviewed August 17, 2026. Tax rules and procedures can change. Your CPA should confirm the law that applies to your acquisition date, placed-in-service date and return.
FREE PRELIMINARY PROPERTY SCREEN