Cost segregation, clarified.

Cost segregation is a strategic tax-saving tool that allows real estate owners to accelerate depreciation deductions by identifying and reclassifying components of a building into shorter-life asset classes.

Instead of depreciating an entire building over 27.5 or 39.5 years, we identify the portions that the IRS treats as 5-, 7-, or 15-year property. Accelerating those deductions lowers taxable income in the early years of ownership.

Most income-producing properties qualify: Multifamily, RV parks, Mobile Home parks, Rentals, Office, Industrial, Retail, Hospitality, Medical, Self-Storage, and more. Primary residences don't qualify.

Yes. You can apply cost segregation retroactively and 'catch up' missed depreciation using an accounting method change.

Anytime during ownership, but ideally the year the property is placed in service or before filing that year's tax return.

Yes. New builds, acquisitions, and improvements/renovations can all be analyzed.

Typically 5, 7, and 15 years for reclassified property. The balance remains 27.5 years (residential rental) or 39.5 years (commercial).

100% Bonus Depreciation is restored with the OBBB for qualified property acquired and placed in service after Jan 20, 2025 (no phasedown like 2024: 60%, 2025: 40%, 2026: 20%). If a property was placed in service prior to January 20, 2025, a taxpayer can still benefit by amending previous returns via Form 3115. The portion not utilized for bonus depreciation is still accelerated and can be applied to like-kind income such as passive rental income.

Generally, rental losses are passive and cannot offset W-2 wages unless you qualify under specific rules (like Real Estate Professional Status). However, passive losses will offset passive income from rentals and carry over year to year until used up — increasing cash flow for other projects or distributed personal income.

We perform an on-site inspection of every property, review provided documentation, and provide an accurate assessment of items that can be accelerated. We deliver an IRS-compliant report of real property that can be reclassified for acceleration and bonus depreciation.

A comprehensive report with asset classifications, methodology, calculations, and CPA-ready schedules.

Typical turnaround is a few weeks from receiving complete documents. Depending on scope and current workflow, additional time may be needed.

Fees vary by property size, complexity, and timeline. In most cases, tax savings far outweigh the fee in year one.

Smaller properties with very low basis might not justify a full study. We'll assess feasibility first at no cost to the client.

Yes — when done correctly with an engineering-based study aligned with IRS guidance.

A properly prepared report should not trigger an audit and is designed to be defensible.

Depreciation taken is subject to recapture rules, but cost segregation only affects timing.

Often, yes — near-term cash flow can outweigh later recapture. It depends on your overall tax strategy.

Accelerated depreciation may offset ordinary income if the rental is treated as non-passive. This is fact-specific.

If you or your spouse qualify, rental losses may be non-passive. Documentation is key.

Cost segregation can be applied at the entity level, with allocations shown on K-1s.

We prepare CPA-ready schedules and support accounting method changes if needed. Our goal is accuracy and efficiency.

Examples include closing statement, construction budgets, appraisals, drawings, fixed asset ledgers, and parcel data.

1. Feasibility snapshot → 2. Engagement & intake → 3. Study & review → 4. Delivery & CPA coordination.