How it works
- 1
We review your property
We take your property details from public records. We send you an estimate of your tax savings and a price.
- 2
We complete your Cost Segregation Study
We start work as soon as you accept the price. An engineer separates the building into components and prices each one. Roofs, HVAC, carpet, cabinets, equipment wiring, parking lots and landscaping all move to their correct depreciation timelines.
- 3
Your tax preparer updates your filings
Your tax professional applies the report findings on your next tax return. If you bought the building earlier, it also covers the deductions you missed.
- 4
You pay less tax this year
The larger deduction lowers your current taxable income.
What kind of building do you own?
Pick the closest one. Every figure below changes with it. Any building you rent out or run a business from can be studied, so pick the nearest match if yours is not listed.
Apartment building is 27.5-year property. We normally move 25% of the building to shorter schedules.
What a study is worth on your building
One building, step by step. Change the controls to match yours. These figures are examples, not a quote.
$1,000,000
Your marginal Federal tax rate
We separate the building into components
Your $1,000,000 building is made of different parts. Each part depreciates at its own rate. On most buildings, 20% to 30% of the value sits in short-lived parts.
Building purchase price
$1,000,000
- 5-year property, deducted in full in year one
- $112,000
- Fixtures and finishes
- 15-year property, deducted in full in year one
- $88,000
- Site improvements
- 27.5-year
- $600,000
- Building structure
- Land
- $200,000
- Never depreciates
Why is year one so large? Bonus depreciation. You can deduct anything with a life of 20 years or less in full, in the year you buy.
You deduct $193,030 more in year one
At a 37% tax rate, you keep $71,421 in taxes you would have paid.
$27,879
$220,909
BeforeNo study
AfterWith a study
Your tax savings grows
Invested at 9.0% a year, that $71,421 grows.
9.0%
Illustrative example. Not a study, quote, or tax advice.
We stand by our work
Engineers price every component of your building
We use Replacement Cost New Less Depreciation. We cost each part as if you built it new today, then subtract the wear it has taken. The IRS Audit Techniques Guide recognizes this method. Every number in your report traces back to a component we priced.
Audit support is included
You pay nothing extra for it. If the IRS asks about your study, we write the response. It covers our method, our classifications and our conclusions.
We work with your tax preparer
You get the report and a spreadsheet of every asset with its schedule. Your preparer applies it to your return. We answer their questions directly.
When is a cost segregation study worth it?
Worth it
- You rent the building out, or run a business from it
- The building is worth $200,000 or more, excluding land
- You still own it, and placed it in service after 1986
- You have income this year or next for the deductions to offset
- It has significant interior build-out, or site work such as parking and landscaping
Not worthwhile
- It is the home you live in. You cannot depreciate it, so there is nothing to reclassify
- You plan to sell within a year or two. Recapture takes the deductions back
- The building is small enough that the fee exceeds the benefit
- You have no income to offset, now or soon
You pay from what you save
We take a share of what you save in the first year. There is no study fee and no retainer. The share depends on what the building is worth.
| What the building is worth | Our share of your first-year saving |
|---|---|
| Up to $2 million | 20% |
| $2m to $5m | 15% |
| $5m to $15m | 10% |
| $15m to $50m | 5% |
| Over $50m | Custom |
We review your building before we start. You get our estimate of what the study returns, and the fee that goes with it, before you commit to anything. If a study will not benefit you, we say so.
Buildings purchased pre-2026 still qualify
A study is simplest in the year you buy. You can still do it later. The deductions you did not take are still yours. You claim the backlog in one year, on your next return. You do not amend your old returns.
Common questions
- What is a cost segregation study?
- When you buy a building, you normally depreciate all of it over decades. The tax code lets some components go faster. A study identifies and prices those components. Carpet, cabinets, equipment wiring, parking lots and landscaping all qualify. You then depreciate them over 5, 7 or 15 years instead of 27.5 or 39. The building does not change. Only the timing of the deductions changes.
- Who performs the study, and what method do you use?
- An engineer performs your study. We use Replacement Cost New Less Depreciation. We price each component as if you built it new today, then subtract the wear it has taken. The IRS Audit Techniques Guide recognizes this method. Every figure in your report traces back to a component we priced.
- What happens if the IRS audits me?
- We stand behind our conclusions, and audit support is included in your fee. We write a response covering our method, our asset classifications and our conclusions. Audit support does not include representing you before the IRS or any tax authority. It does not include testimony. It does not include preparing or amending your returns. It does not cover tax positions that are not in our study.
- What does it cost?
- We take a share of what you save in the first year. There is no study fee and no retainer. The share runs from 20% on a building worth up to $2 million down to 5% on a building worth $15 million or more. Above $50 million we price the job individually. You get our estimate of what the study returns, and the fee that goes with it, before you commit to anything.
- How long does it take?
- We start as soon as you accept the price. You need the report at tax time, not tomorrow, so we work to your filing date. If your filing date is close, tell us when you send the address.
- What do you need from me?
- To start, just the address. After you sign the engagement, we ask for documents that make the study more accurate. A closing statement, an appraisal, and invoices for work you have done on the building all help. Send what you have. You do not need to find every receipt. Keep them on file in case the IRS asks.
- Why do you use what I paid, not what the building is worth now?
- The IRS bases depreciation on your cost, not on market value. You recover what you spent on the building. If you paid $500,000 and it is now worth $700,000, you depreciate $500,000. The $200,000 of appreciation is not a deduction.
- I bought the building years ago. Is it too late?
- No. A study is simplest in the year you buy, and it still works later. The deductions you did not take are still yours. You claim the backlog in one year, on your next return. You do not amend your old returns.
- Did the 2025 tax act change this?
- Yes, and it made a study worth more. Bonus depreciation returned to 100% for property acquired after 19 January 2025, and it is now permanent. Under the old rules it would have reached zero by 2027. Bonus applies only to components with a life of 20 years or less. An unstudied building is a single 39-year asset, so none of it qualifies. The study is what identifies the components that do.
- What happens if I sell the building?
- The IRS recaptures the accelerated depreciation when you sell. You keep the use of the money until then, which is what a study is worth. If you plan to sell within a year or two, a study rarely pays for itself.
- Is this the same as appealing my assessment?
- No. An appeal challenges the value the county puts on your property, which sets your property tax bill. A study changes the timing of deductions on your income tax return. The two do not conflict. Most owners of income property benefit from both.
Appealing your assessment is a separate service — see what that costs.
Find out what a study is worth on your building
Give us the address. We review the county record and tell you what a study would return, and what it would cost, before you commit to anything.