Cost segregation, in plain words.

It is an engineering-based study that finds parts of your building that wear out faster than the shell. Those parts qualify for shorter depreciation lives (5, 7, or 15 years) instead of the default 27.5 or 39 years. That moves big deductions into your early years, when they help the most. Read the full guide.

Without a study, you depreciate the whole building over 27.5 years (rental) or 39 years (commercial). With a study, a specialist finds the parts that qualify as personal property (carpet, appliances, special wiring) or land improvements (paving, fencing, exterior lighting). Those parts depreciate faster, and many now qualify for 100% bonus depreciation.

Almost any building you depreciate: single-family rentals, duplexes, apartments, hotels, restaurants, retail, office, medical, industrial, warehouse, and self-storage. Land itself is not depreciable, so the study works on the building and site improvements.

There is no legal minimum, but the math works best above about $200,000 in building cost (not counting the land). Above that, the savings almost always beat our flat fee by a wide margin. Below it, the benefit is smaller, so we will tell you straight if it is not worth it. See the math.

The IRS gives each part of a building a useful life. 5-year parts are things like carpet, appliances, and special wiring. 7-year parts include some business fixtures. 15-year parts are outdoor items like paving, fencing, and landscaping. The shorter the life, the faster you write it off, and many of these parts also qualify for 100% bonus depreciation.

No, but it helps. If you are not, your rental losses are passive and can only offset passive income. Two ways to use the losses against more income: qualify as a real estate professional (750+ hours and more than half your work in real estate), or use the short-term rental exception (average stays of 7 days or less where you materially participate). See how the short-term rental exception works.

No problem. We can apply cost-seg to a prior-year property using Form 3115. The IRS lets you take a one-time catch-up adjustment on this year's return. You do not need to amend old returns. See how the catch-up works.

Yes. We apply the study to the replacement property's basis. It is a bit more involved because the basis is split between the old property and the new money. We coordinate with your CPA on the carryover before we classify anything.

Both can qualify. Inherited property usually gets a stepped-up basis equal to its value at the date of death. Gifted property usually carries over the giver's basis. We handle the basis math in our worksheet.

Not your personal residence, since you do not depreciate it. But if part of your home is a rental, or you have a separate home office that counts as a business space, the business portion can qualify. The study only works on property you depreciate for tax purposes.

Yes. Cost segregation works the same whether you hold the property in your own name, an LLC, a partnership, or an S-corp. The deductions flow through to the owners. We coordinate with your CPA so the entity's return is set up correctly.

As a rule of thumb: if your building cost is over about $200,000 (not counting the land), the savings usually beat our flat fee by a wide margin. The higher your tax bracket and the longer you plan to hold, the better the math gets. We give you a free estimate first, so you see the number before you pay anything.

Then a study may not be right for you. When you sell, part of the faster depreciation can come back as tax (called recapture). A short hold gives the deductions less time to work, so the benefit can shrink or disappear. A study is strongest when you plan to hold the property for a while, or use a 1031 exchange when you sell.

Passive-loss limits may defer your benefit. If your rental losses are passive and you have no passive income to offset, the deduction can sit in a carryforward until you can use it. That is not wasted, but it is delayed. Ask your tax advisor how the losses would land on your return before you buy a study.

Year-one federal savings often run 5% to 10% of building basis for a home rental, and up to 25% to 35% for a restaurant or specialty property. We give you a year-by-year projection before you commit. Your real number depends on your tax bracket, your state, and whether you can use the losses now. See if a study is worth it for you.

Bonus depreciation lets you deduct the full cost of qualifying short-life parts in the first year. Under the OBBBA law, 100% bonus depreciation is permanent for property bought after January 19, 2025. A study finds the parts that qualify so you can claim the full benefit.

The extra is not wasted. A loss you cannot use this year carries forward to future years. So even if you cannot use all of it now, you keep the benefit for later. We show you the year-by-year picture before you start.

Sometimes. Normal rental losses are passive and only offset passive income. But if you qualify as a real estate professional, or you run a short-term rental and materially participate, the losses can offset your regular income. See the short-term rental path.

Yes. Every study follows IRS Pub 5653 quality standards. We back each claim with photo evidence and our published library of court and IRS authorities (Tax Court cases and IRS rulings), bundled right in the report. And if the IRS examines your study, The Audit Defense Pledge means we draft the response and defend the work, at no extra cost.

40 hours of professional time per audit, for three years from delivery. We draft the document request response, produce the workpapers, and defend the methodology in writing. See the full scope.

About 45 days from a complete intake to the final PDF. That timeline buys depth: photo evidence plates on every study, and Expert Reviewed studies add an accountant's sign-off before they ship. If a delay is on our side, we do not let it slow your filing.

Self-Serve home rental studies start at $497. Expert Reviewed studies, checked and signed by an accountant on our team, start at $2,500 and scale with property value. Commercial starts at $1,497. Audit defense and photo evidence are always included. See full pricing.

Usually not. Our standard study is document-based: we work from photos, plans, and the records you upload. We require a site visit for property worth more than $1.5M. Below that, you can add one as an optional upgrade for extra detail and strength in the report.

The basics: the purchase price and closing date, a recent depreciation schedule from your last return, and some photos or plans of the property. We send a short checklist so nothing is missed. The more complete your intake, the faster we deliver.

Yes, and we encourage it. We deliver the study and the Form 3115 prep so your preparer can plug the numbers right into your return. We are happy to talk through any questions your CPA has.

When you sell, some of the faster depreciation can come back as tax. This is called recapture. It does not erase your benefit, because you still got to use the money for years in the meantime. A study is strongest when you plan to hold the property for a while.

Usually not. The value of using deductions now almost always beats the cost of recapture later, especially if you hold the property or use a 1031 exchange to defer the gain when you sell. We model both sides so you can decide with eyes open.