What is a cost segregation study?

A cost segregation study is a detailed engineering and tax analysis that reclassifies real property components into personal property or land improvements. This accelerates depreciation deductions.

Who should consider cost segregation?

Real estate investors with properties worth $1M+ typically benefit from cost segregation. It's especially valuable for commercial properties, multifamily buildings, and recently acquired or improved properties.

How long does a cost segregation study take?

Typically 4-8 weeks from start to finish, depending on property complexity and document availability.

What documentation do I need?

Original construction cost, breakdown of costs by component, property photos, blueprints, and acquisition documents. We guide you on what we need.

Can I do cost segregation retroactively?

Yes, you can file an amended return (Form 3115) to implement cost segregation for up to 3 prior years.

Cost Segregation Studies for Real Estate Investors

Cost segregation is one of the most powerful tax strategies available to real estate investors. By reclassifying building components from 27.5 or 39-year property to 5, 7, or 15-year property, you can accelerate tens of thousands of dollars in depreciation deductions into year one.

What We Cover

Component-level analysis of building systems and finishes
Reclassification to 5-year, 7-year, and 15-year MACRS property
Bonus depreciation coordination for maximum year-one deductions
Form 3115 catch-up depreciation for properties already in service
Short-term rental (STR) loss optimization for W-2 earners
Long-term rental depreciation coordination
Partial asset disposition strategies
Lookback studies for properties acquired in prior years

Our Process

Property Analysis

We review your property details, acquisition costs, improvements, and current depreciation schedule.

Engineering Study

Our team conducts a detailed component-level analysis identifying assets eligible for accelerated recovery.

Tax Impact Modeling

We calculate the depreciation acceleration and model the tax impact across current and future years.

Implementation

We prepare Form 3115 (if applicable), update depreciation schedules, and coordinate with your return filing.

Frequently Asked Questions

What types of properties qualify for cost segregation?

Any commercial, rental, or investment property with a depreciable basis. Short-term rentals, long-term rentals, office buildings, retail spaces, and mixed-use properties all qualify.

Is there a minimum property value?

We typically recommend cost segregation for properties with a basis of $300,000 or more, though the breakeven point depends on your tax rate and situation.

Can I do a cost segregation study on a property I already own?

Yes. A lookback study with Form 3115 lets you catch up on all missed accelerated depreciation in a single tax year, without amending prior returns.

Ready to Get Started?

Schedule a complimentary consultation and discover how our cost segregation studies for real estate investors services can work for your situation.

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