Can I Use Zero Land Basis for a Condo Cost Segregation Study?
A focused answer for business owners and rental-property owners.
The direct answer
Not merely because the property is a condo. Determine what ownership interest was purchased, including any land or common-property interest, and use a supportable allocation. Land is not depreciable.
How to evaluate your situation
Review the deed, purchase documents, association information and valuation evidence. A unit owner may have an interest beyond the interior walls, and the appropriate allocation depends on the property rights and facts. A tax assessment can be helpful evidence but should be considered in context rather than used mechanically. The study should start from a reconciled depreciable basis, not an assumed zero-land figure selected to maximize deductions. Compare the allocation with any prior return treatment before changing it. If the basis is wrong, fixing asset classification alone will not make the depreciation schedule correct. Ask who is responsible for the allocation and how it is supported.
Hypothetical example
A condominium purchase includes a proportional interest in common land. The owner cannot remove that interest from the analysis solely because the unit occupies an upper floor. The reviewer reconciles the ownership and valuation evidence before determining the study’s depreciable basis.
Records to gather
- Deed
- closing statement
- association documents
- appraisal
- assessment details
- prior basis allocation
- asset schedule
Related question
Can I use a fixed land percentage for every condo?
No universal percentage fits every property. Document an allocation reflecting the actual ownership interests and supportable values.
Source and next step
Updated September 30, 2026. This general federal tax discussion does not decide an individual filing position. Apply the current instructions for the actual tax year and your complete facts.
Review the related AE service and bring the listed records to a discovery call.
AE engagement pricing
$7,800 standard advisory engagement. No required recurring annual planning fee. Two $3,900 payments, 30 days apart. Returns, amendments, cost segregation and additional services are separately scoped. See published pricing for the service you need.
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