Life moves, and the house you used to live in becomes the rental you now own. Converting a primary residence to a rental is one of the most common ways people back into being a landlord, and it raises a question we get constantly: can I run a cost segregation study on it, and can I take the 100% bonus depreciation everyone keeps talking about?
The honest answer has two parts. Yes, a cost segregation study still helps a converted home. And no, in most conversions you cannot take the restored 100% bonus depreciation on the building, no matter what a study finds. The reason is a quiet rule about acquisition dates.
First, the number that actually decides everything: your basis at conversion.
Before any study, the conversion itself sets your depreciable basis, and it is often lower than people expect. When you turn a personal residence into a rental, your basis for depreciation is the lesser of your adjusted cost basis (what you paid, plus improvements) or the property's fair market value on the conversion date. Then you subtract the land, because land never depreciates.
That lesser-of rule usually cuts the way people do not like. If your home appreciated since you bought it, depreciation is capped at your original cost, not today's higher value. Either way, get a defensible valuation and a clean land-to-building split as of the conversion date and keep them in the file, because missing documentation here is one of the few things that can permanently sink a depreciation deduction.
Why the "acquired after January 19, 2025" rule usually blocks bonus depreciation.
Here is the part the YouTube version leaves out. The One Big Beautiful Bill restored 100% bonus depreciation, but only for property acquired after January 19, 2025. For a converted home, "acquired" means the date you originally bought the house, not the date you converted it. Conversion is not an acquisition.
So if you bought your home in 2019 and convert it to a rental in 2026, the acquisition date for bonus purposes is 2019. That puts it under the old phase-down rules tied to that date, a reduced bonus rate at best, not the new 100%. And if you originally bought before September 28, 2017, none of the reclassified components qualify for bonus at all, not the 5-year appliances or the 15-year land improvements a study would identify. The rule keeps assets you have owned for years from qualifying for a benefit built for new acquisitions.
The practical takeaway: for most people converting a home they have owned for a while, the headline 100% write-off is not on the table for the existing structure. That is not a reason to skip a study. It is a reason to understand what a study actually does.
What a cost segregation study still does, even with no bonus.
Cost segregation does not need bonus depreciation to earn its fee. Its core job is reclassification: moving components out of the slow 27.5-year residential bucket into 5-, 7-, and 15-year buckets. Those shorter classes use accelerated, declining-balance methods, so even on the ordinary MACRS schedule more of the deduction lands in the early years, when it is worth most.
Take a home converted to a rental in 2026 with a building-only depreciable basis of $360,000. On straight-line 27.5-year depreciation, that is about $13,100 a year, flat. Now say a residential study reclassifies 22% of the basis, roughly $79,000, into shorter-life property split between 5-year personal property and 15-year land improvements. Even with zero bonus depreciation, that $79,000 runs on accelerated schedules instead of the 27.5-year line. In the first full year, the reclassified slice throws off about $11,000 of depreciation on its own, versus roughly $2,900 if it had stayed on the 27.5-year clock, about $8,000 of extra deduction pulled into year one, with more stacked into years two through five. At a 32% marginal rate, that first-year swing is worth around $2,600 in cash against a single fixed-fee study, and the acceleration keeps compounding.
Where you can still get bonus: the new money you put in.
There is a case where bonus comes right back into play: new assets you buy for the rental after you convert it. Replace the appliances, put in new flooring, or furnish the place to run it as a short-term rental, and those are newly acquired assets placed in service after the conversion. Because you did not previously own and use them, they can qualify for bonus at the rate in effect when you buy them, including 100% for qualifying property acquired after January 19, 2025. So the converted structure rides the MACRS schedules, while the new money you invest to make it rentable can often be written off immediately, and a study cleanly separates the two so each is audit-ready.
So is a study worth it on a converted home?
Usually yes, but the honest answer depends on the basis and your tax situation, not on a slogan. If your converted home has a building basis in the low-to-mid six figures and you will hold it as a rental, the front-loaded MACRS deductions, plus any bonus on new improvements, typically clear a flat, fixed study fee comfortably. If your basis is small or you are about to sell, the math gets thinner, and we will tell you so.
If you converted in a prior year and never did a study, ask your CPA whether catching up prior-year depreciation makes sense on your current return before you order anything — that piece is theirs to drive, and it sits outside the standard study. You can also ballpark your own numbers with the savings estimate on our homepage.
The point is not that a converted home is a jackpot or a dud. It is that the two rules that govern it, the lesser-of basis rule and the acquisition-date rule for bonus, are specific and easy to get wrong. Get them right, and a study is a clean, audit-ready way to accelerate real deductions.