Service · 01
Cost Segregation,
engineered to the dollar.
An IRS-sanctioned strategy that reclassifies 20–35% of a building's basis from 39-year property into 5, 7, and 15-year property — unlocking accelerated and bonus depreciation in year one.
The fundamentals
Three concepts you should master before signing a closing statement.
The IRS lets you deduct the cost of an income-producing property over its useful life. Residential rental: 27.5 years. Commercial: 39 years. Spread evenly, year by year.
Some property components have a shorter useful life: 5 years (furniture, fixtures), 7 years (machinery), 15 years (land improvements). Deducting these on a faster schedule front-loads cash savings.
An engineering-based study that breaks a single building purchase into its components — identifying every piece eligible for shorter-life accelerated depreciation. The result: 20–35% of basis moves out of 39-year property.
Tax liability reduction
Real numbers on a real building.
Sample: a $2.5M multifamily property placed in service in 2025 — under the OBBBA's permanent 100% bonus depreciation.
Cash that was going to the IRS — redirected to your balance sheet.
Cost segregation doesn't reduce your total depreciation — it accelerates it. You take more in year one (and the next several), less in years 10+. The time value of that cash is massive.
Investors typically reinvest the freed cash into the next acquisition, debt reduction, or capital improvements — compounding the IRR of the underlying portfolio.
- ▸Down payment on the next deal
- ▸Principal paydown on existing debt
- ▸Capital improvements / value-add
- ▸Distributions to LPs
Bonus depreciation schedule
OBBBA changed everything. 100% bonus is back — permanently.
The One Big Beautiful Bill Act (OBBBA), signed in July 2025, permanently restored 100% bonus depreciation for qualified property placed in service in 2025 and beyond. The 80%/60% rates from 2023–2024 remain in effect for those years. Bonus depreciation applies to qualifying short-life property (5/7/15-year) identified through cost segregation.
Industries that qualify
If your building generates income, it probably qualifies.
Who qualifies
Five investor profiles that benefit most.
Our 5-step process
How cost segregation works — and how our team supports you.
- 01Free Preliminary Review
We model expected savings at no cost. If the math doesn't comfortably exceed the fee, we tell you up front.
- 02Detailed Engineering Report
Our engineers analyze blueprints, invoices, and site data. We walk the property, identify every reclassifiable component, and build a defensible asset schedule.
- 03Report Delivery
You receive a complete engineering report documenting every reclassified asset with photos, citations, and depreciation tables — audit-ready.
- 04CPA Coordination
We work directly with your CPA or accountant — handing them everything they need to apply the deductions on your return.
- 05Form 3115 In-House
For look-back studies, we prepare and file Form 3115 in-house — no amended returns required, and the catch-up deduction lands in a single year.
Case studies
Four properties. Four real outcomes.
First-year accelerated depreciation against active K-1 income.
Reclassified mechanical, electrical, and process equipment.
Owner qualified as material participant — offset W-2 income.
Look-back study; catch-up deduction filed via Form 3115.
FAQ
Have questions? We've answered them.
Pricing, timing, audits, recapture, the short-term rental loophole, working with your CPA — it's all covered in our FAQ library in the Knowledge Center.
Free preliminary review. Zero obligation.
Send us a closing statement or 1098. We'll model your savings and reply within one business day.
Request Free Review