How Cost Segregation Works
A simple, transparent process that maximizes your tax savings in just 7 business days
A simple, transparent process that maximizes your tax savings in just 7 business days
Submit your property information through our simple online form. Tell us about your property type, location, purchase price, and in-service date.
Timeline: You'll receive your free estimate within 48 hours
Once you approve, we'll send you a secure data form. You'll provide property details, architectural documents, purchase records, and any improvements made to the property.
Timeline: 1-2 business days to collect and review your documents
Our licensed engineers analyze your property component-by-component. We estimate useful lives, development costs, and allocate purchase price to identify accelerated depreciation opportunities.
Timeline: 3-4 business days for thorough analysis and review
You receive your complete, audit-ready cost segregation study. Included: detailed analysis, supporting documentation, Form 3115 guidance for filing your election, and direct coordination with your CPA.
Timeline: Delivered by day 7 with ongoing support available
Your cost segregation study supports your Form 3115 (Application for Change in Accounting Method) filing. This is how you implement the accelerated depreciation.
We provide complete filing guidance. Your CPA typically handles the actual tax return filing.
Once filed, you can begin claiming the additional depreciation on your tax returns. The results? Reduced taxable income and immediate cash tax savings.
Most investors see significant tax savings in year 1, with benefits continuing throughout the property's useful life.
If the IRS questions your cost segregation study, we provide full documentation and methodology explanation. Our engineer-led approach is built to withstand audit scrutiny.
This is why having a detailed, defensible study matters—and why we include audit support.
Need to update your study as your property changes? We can provide updates if you make significant improvements or if tax law changes affect your strategy.
We're here to support your tax strategy long-term.
Cost segregation is an IRS-approved technique that breaks down a building's purchase price into its individual components and assets. By identifying shorter-lived assets (like carpeting, fixtures, and equipment), you can accelerate depreciation claims and reduce your taxable income faster.
Instead of depreciating the entire building over 39 years, cost segregation allows you to depreciate shorter-lived components over 5, 7, or 15 years. This frontloads your tax deductions.
Cost segregation creates the most value for investors with:
Tax savings depend on your property type, components, purchase price, and tax bracket. Most of our clients see first-year tax savings of 3-10× the cost of their cost segregation study. A $895 report frequently generates $3,000-$10,000+ in year-one tax savings—making the ROI immediate and substantial.
When done correctly by qualified engineers, cost segregation is low-risk. The IRS has approved this strategy for decades. What matters is proper documentation and engineering methodology—which is why we use licensed engineers and provide comprehensive audit support.
Ideally within 1-3 years of purchase. The sooner you file, the sooner you benefit from accelerated depreciation. However, studies can be valuable even years later if you haven't filed your election yet.
Yes, through Form 3115 you can file a "late" election for prior years. However, the sooner you file, the more depreciation you capture. Consult with your CPA about your specific situation.
Cost segregation works regardless of financing. The depreciation benefits are based on your basis in the property, not on how it's financed. Your CPA will integrate the study with your financing structure.
Yes, when you sell, you'll pay recapture taxes on the accelerated depreciation. However, the benefit of deferring taxes for years (5-10+ years) typically exceeds the eventual recapture cost. Discuss recapture planning with your CPA.
Absolutely. We encourage CPA involvement. In fact, we provide direct communication with your tax professional throughout the process. Your CPA's input helps ensure the study aligns perfectly with your tax planning.
Cost segregation works best on commercial and investment real estate. Primary residences typically don't benefit (because residential depreciation isn't deductible). Properties under $50,000 may not justify the cost.
Get your free estimate in 48 hours and start maximizing your tax savings.
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