Cost Segregation

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Cost Segregation enables owners of commercial and rental property to take the depreciation deductions they are entitled to. This substantially reduces current income tax, increases cash flow and accelerates investment and business goals.

Without cost segregation, you’re essentially loaning money to the government. The IRS assumes every part of your property is the same and you have to wait up to 39 years to deduct components that depreciate in 5 years. We fix that.

On average, 30% of your property can be reclassified and deducted much sooner… and it just got even better with the return of 100% Bonus Depreciation!

It’s Your Money. Why wait? Take your deductions now.

Tax Deduction

250,000+

Per property on average

ROI

10x

Per property on average

Time to Complete

2-3 weeks

For most properties

Strategic Property Study

We dive deep to maximize your tax savings. Our fee depends on it.

Our Process begins with a site inspection. Construction engineers and tax experts closely examine 150+ property components, inside and out, to properly identify and reclassify eligible assets to their correct 5, 7 or 15-year asset lives. Costs are assigned to each property component using the latest industry cost data in relation to their depreciable cost basis. Finally, a detailed report is created to support all of our findings which includes updated tax asset details to file in your next tax return.

The result is immediate and substantial – faster deductions, less short-term tax liability and more cash in your pocket. Commonly referred to as accelerated depreciation, but it’s really just proper depreciation according to IRS guidelines.

Commercial Properties

Maximize depreciation on office buildings, warehouses, retail centers, hotels, medical facilities and much more. Don’t wait 39 years to take your deductions.

Residential Properties

Optimize tax benefits on rentals, apartment buildings, student housing, senior living facilities, and mixed-use properties. Accelerate deductions from 27.5 years to 5-15 years.

Property Specific Data

Specialized Cost Segregation by Property Type

We tailor our studies based upon our client’s unique property type. See how much depreciation can be accelerated for your property below.

Property Type	Depreciation Acceleration
Apartment Building	20% – 40%
Office Building	22% – 40%
Manufacturing Facility	20% – 40%
SFR / Vacation Rental	18% – 30%
Warehouse	20% – 30%
Medical Office / Clinic	22% – 40%
Mixed-Use Property	20% – 40%
Retail Strip Mall	18% – 40%
Restaurant	20% – 50%
Assisted Living Facility	22% – 45%
Fitness Center	22% – 45%
Grocery Store	20% – 45%
Auto Dealership	25% – 50%
Hotel	20% – 40%
Research Facility	22% – 45%
Leasehold Improvements	20% – 80%
Golf Course	28% – 60%
Winery	18% – 28%

Maximization Guide

Commonly Missed Opportunities

Don’t overlook these valuable components in your cost segregation study

Electrical Systems

Task Lighting
Security Systems
Emergency Power Systems
Specialized Equipment Wiring
Building Management Systems
Data Center Infrastructure
LED Lighting Upgrades

HVAC Components

Supplemental HVAC Units
Process Cooling Systems
Specialized Ventilation
Temperature Control Systems
Clean Room Systems
Energy Recovery Units
Smart Building Controls

Interior Improvements

Decorative Finishes
Removable Partitions
Special Floor Coverings
Custom Millwork
Acoustic Treatments
Specialty Lighting Fixtures
Modular Office Systems

Site Improvements

Landscaping Features
Parking Lot Lighting
Security Fencing
Irrigation Systems
Outdoor Signage
Loading Dock Equipment
Site Utilities

HVAC Components

Fire Suppression Equipment
Access Control Systems
Audio/Visual Systems
Telecommunications
Clean Room Infrastructure
Laboratory Equipment
Medical Gas Systems

Interior Improvements

Window Treatments
Decorative Facades
Entrance Systems
Specialty Doors
Solar Shading Devices
Green Roof Systems
Building Wraps

Bonus Depreciation Is Back at 100%

Bonus depreciation has been fully restored! This creates one of the most powerful tax opportunities available to real estate investors and business owners.

You can once again deduct 100% of the cost of qualifying property in the same year it’s placed in service. That means faster write-offs, stronger cash flow, and more capital to reinvest into your business.

What It Means for You

Bonus depreciation applies to any personal property with a useful life of less than 20 years including:

Non-structural interior improvements

Furniture, fixtures, and equipment (FF&E)

Land improvements such as parking lots and landscaping

Expert Guidance

Get comprehensive answers to common questions about cost segregation studies

What is included in a cost segregation study?

A cost segregation study surveys your building's subcomponents, like lighting fixtures, heating and air conditioning systems, and other components that deteriorate over time. It assigns five- or 15-year lifespans to these subcomponents. Then the study assesses how much in taxes you can write off because of your financial loss from these aging subcomponents.

How much should a cost segregation study cost?

It should cost between $3,000-$12,000. However, the capital outlay is more than worth it, considering you can save hundreds of thousands, if not millions, in taxes by commissioning a study. The ROI is amazing.

What is the best time of the year to do a cost segregation study?

Anytime. As long as you commission your cost seg study before a construction rehab. Because cost segregation sets a baseline for the original purchase, it's easier for us and the IRS to set that baseline by performing the study before the rehab, with an engineer documenting the reclassification, before the improvements are made.

Are cost segregation studies worth it?

Definitely! The 2025 One Big Beautiful Bill Act allows for an immediate deduction for the full costs in the first year. If you own a property with a class life of 27 years, you might be eligible for a sizeable bonus depreciation in year one by reallocating some of your building's assets to a five- or 15-year lifespan.

What types of properties qualify for cost segregation?

Most commercial and investment properties qualify, including office buildings, retail spaces, industrial facilities, apartments, hotels, medical facilities, and warehouses. Properties must have been built, purchased, or substantially renovated after 1986 to qualify.

How long does a cost segregation study take?

The typical timeline is 4-6 weeks from start to finish. This includes the initial property inspection, engineering analysis, and final report preparation. Larger or more complex properties may require additional time.

Can I do a cost segregation study on a property I've owned for several years?

Yes, through a 'look-back' study. You can claim missed depreciation from prior years without amending tax returns by filing Form 3115. This allows you to take advantage of accelerated depreciation even on properties owned for several years.

What documentation is needed for a cost segregation study?

Typically, we need property purchase documents, construction drawings if available, depreciation schedules, and renovation records. However, our engineering-based cost segregation approach can still deliver results even with limited documentation.

How does bonus depreciation affect cost segregation benefits?

Bonus depreciation allows for immediate expensing of qualified property. Through 2023, 80% bonus depreciation is available, phasing down to 60% in 2024, 40% in 2025, and 20% in 2026. This significantly enhances the benefits of cost segregation studies.

Will a cost seg study trigger an IRS audit?

No, a properly conducted cost segregation study should not trigger an audit. Our engineering-based approach follows IRS guidelines and provides thorough documentation to support all classifications and calculations in case of an audit.