Cost Seg Smart ranks 30A, Park City and Breckenridge as top short-term rental markets for tax deductions

Cost Seg Smart’s new scenario-based ranking compares 24 U.S. rental markets and finds that first-year cost segregation deductions can vary widely even at the same modeled purchase price. The open dataset shows 120 modeled properties, with 30A, Florida leading the list and deductions ranging from about $51,000 in Chicago to $418,000 on 30A.

Why it matters: - Cost segregation can sharply increase first-year depreciation deductions for short-term rental buyers. - The same purchase price can produce very different tax outcomes depending on land value, building components and included amenities. - Buyers evaluating rental investments need tax estimates that match the actual property mix, not just the ZIP code.

What happened: - Cost Seg Smart published a scenario-based ranking of the top 10 U.S. short-term rental markets by median modeled first-year cost segregation deduction. - The ranking covers 24 U.S. rental markets and 120 modeled properties. - Florida’s 30A market ranked No. 1 with a median modeled first-year deduction of $418,000 and a modeled tax value of $155,000. - Park City, Utah ranked No. 2 with a $280,000 deduction and $104,000 tax value. - Breckenridge, Colorado ranked No. 3 with a $232,000 deduction and $86,000 tax value. - The full list also included Bozeman, Sedona, Maui, Destin, Naples, Tahoe and Gatlinburg.

The details: - Cost segregation separates building components that qualify for shorter depreciation periods from the building itself. - Bonus depreciation can accelerate those deductions into the first year. - The top 10 by median modeled first-year deduction were 30A, Park City, Breckenridge, Bozeman, Sedona, Maui, Destin, Naples, Tahoe and Gatlinburg. - Tax values assume a 37% federal rate and immediate use of the deduction. - The tax values do not represent additional savings over depreciation available without a study. - Across all 24 market medians, the modeled deduction ranged from about $51,000 in Chicago to $418,000 on 30A. - The median modeled deduction across all markets was about $136,000. - Three markets with a $1.325 million median modeled purchase price produced first-year deductions ranging from about $103,000 to $232,000. - The Breckenridge and Maui scenarios were furnished short-term rentals. - The Los Angeles scenarios were unfurnished long-term rentals. - Gatlinburg ranked 10th with a $153,000 deduction and $56,000 tax value. - Gatlinburg’s median modeled price was $595,000, making its deduction about 26% of price. - 30A’s deduction was about 28% of its roughly $1.325 million modeled price. - Bozeman produced a larger median deduction than Maui, at about $219,000 versus $198,000. - Bozeman’s median modeled price was $825,000, compared with $1.32 million for Maui. - Bozeman’s modeled land allocation was 18%, compared with 45% for Maui. - Lower land allocation leaves more depreciable basis. - Assumed furnishings and amenities also differ across scenarios.

Between the lines: - The ranking favors higher-priced markets because larger purchases usually include more depreciable components. - The market order changes when deductions are measured against purchase price instead of in raw dollars. - A larger deduction is only one part of an investment decision alongside price, operating costs and rental income. - The public dataset and market-by-market figures make the methodology more transparent than a typical marketing ranking.

What's next: - Cost Seg Smart says the full dataset, methodology and per-market figures are publicly available. - The scenarios were generated on 2026-09-07 using version 3.185.0 of the company’s study engine. - The model assumed properties were bought and placed in service on 2025-06-15. - Each market uses five modeled scenarios, not completed customer studies. - Whether an owner can use a deduction in the year it is taken depends on the owner’s tax situation. - State taxes are excluded. - The dataset publishes the assumed amenities for every scenario under a Creative Commons Attribution 4.0 license.

The bottom line: - In cost segregation, the headline purchase price is not the whole story. What is inside the property, and how much of the price is land, can materially change the first-year tax benefit.