Cost Seg Smart Ranks the Top 10 Short-Term Rental Markets for Cost Segregation by Tax Benefit

Florida's 30A, Breckenridge and Park City lead the scenario-based ranking of 24 U.S. markets; the open dataset includes 120 modeled properties.

LOS ANGELES, CA, CA, UNITED STATES, September 8, 2026 /EINPresswire.com/ -- Two rental properties can cost the same and still produce very different first-year deductions. In newly published Cost Seg Smart scenarios, three markets sharing a $1.325 million median modeled purchase price produced first-year deductions ranging from about $103,000 to $232,000.

Cost segregation identifies components that qualify for shorter depreciation periods than the building itself. When those components are eligible for bonus depreciation, they can generate an accelerated first-year deduction.

"The striking result was how far apart the deductions were at the same modeled purchase price," said Jamie Melgar, Business Operations Specialist at Cost Seg Smart. "What separated them was what came with the building and how much of the price was land, which cannot be depreciated at all."

The Breckenridge and Maui scenarios are furnished short-term rentals; the Los Angeles scenarios are unfurnished long-term rentals. The analysis covers 120 modeled scenarios across 24 U.S. rental markets, with the full dataset, methodology and per-market figures available publicly.

Top 10 Markets by Median Modeled First-Year Deduction

Tax values apply an assumed 37% federal rate and immediate use of the deduction. They do not represent additional savings over depreciation available without a study.

1. 30A, Florida: $418,000 deduction, $155,000 tax value
2. Park City, Utah: $280,000 deduction, $104,000 tax value
3. Breckenridge, Colorado: $232,000 deduction, $86,000 tax value
4. Bozeman, Montana: $219,000 deduction, $81,000 tax value
5. Sedona, Arizona: $199,000 deduction, $73,000 tax value
6. Maui, Hawaii: $198,000 deduction, $73,000 tax value
7. Destin, Florida: $187,000 deduction, $69,000 tax value
8. Naples, Florida: $181,000 deduction, $67,000 tax value
9. Tahoe, California/Nevada: $159,000 deduction, $59,000 tax value
10. Gatlinburg, Tennessee: $153,000 deduction, $56,000 tax value

Across all 24 market medians, the median modeled deduction was about $136,000, ranging from about $51,000 in Chicago to $418,000 on 30A.

What the ranking does not show

The list rewards expensive markets, because a bigger building carries more components. Measured against what a buyer spends, the order changes. Gatlinburg sits tenth on a $595,000 median price, and its deduction is about 26% of that price, close to 30A's 28% at roughly two and a half times the cost.

Bozeman shows the same point inside the top five. Its scenarios produced a larger median deduction than Maui's, about $219,000 against $198,000, despite a median modeled price of $825,000 against $1.32 million. A lower modeled land allocation, 18% against 45%, leaves more depreciable basis, and the assumed furnishings and amenities differ as well.

A bigger deduction is still only one piece of the decision, alongside price, operating costs and rental income.

"Before you rely on a tax estimate, check what it assumes you are buying," Melgar said. "Does it include furniture, a pool or other improvements? Are those actually part of the purchase? The assumptions should describe your property, not just another property in the same ZIP code."

Methodology

Scenarios were generated on 2026-09-07 with version 3.185.0 of Cost Seg Smart's study engine, assuming the property was bought and placed in service on 2025-06-15. Each market is five modeled scenarios, not completed customer studies, and each is given the amenities typical of a rental of that kind in that market. Whether an owner can use a deduction in the year it is taken depends on their own tax situation. State taxes are excluded. The dataset publishes the assumed amenities for every scenario under a Creative Commons Attribution 4.0 license.

About Cost Seg Smart

Founded in 2025, Cost Seg Smart provides engineering-based cost segregation studies for short-term rentals, residential and multifamily properties, and commercial buildings. Residential studies start at $495, with most priced between $895 and $1,995; commercial studies start at $1,995. The company publishes open research on cost segregation, pricing and market data.

Media contact: Jamie Melgar, Business Operations Specialist, Cost Seg Smart, press@costsegsmart.com

Jamie Melgar
Cost Seg Smart
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