Congress Approves 100% Bonus Depreciation for Real Estate Investments. R&D Tax Credit Deadline is July 6, 2026 - Restore 2022-2024 Expensing

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Frequently Asked Questions

Clear answers to common questions so you can make confident decisions with ease.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Expert Guidance

Get answers to the most common questions about R&D tax credits

What is the R&D Tax Credit?

The R&D tax credit offers a dollar-for-dollar reduction in a company's tax liability, or payroll taxes, aiming to encourage innovation and technological advancements in the U.S. It is calculated based on a company's eligible wages, technical consultants, and consumables for experimentation. The federal tax credit averages 14% of eligible costs.

R&D incentives are available for a variety of activities and expenses. These include software development, payroll expenses related to R&D activities, the creation of new manufacturing processes, and product innovation. Activities that would otherwise be considered 'day-to-day operations,' such as designing new products or analyzing market trends, may be eligible under this credit!

To qualify, the IRS has a four-part test: 1) New or Improved Business Component, 2) Activities Technological in Nature, 3) Elimination of Uncertainty, and 4) Process of Experimentation. Most companies don't realize their current development and research activities might already qualify.

Yes! R&D incentives can be ideal for startups—particularly those of a technical nature, such as in the fields of computer science or pharmaceuticals. The credits can deliver a financial windfall to qualifying taxpayers.