How Cost Segregation Works
What is an Engineered Cost Segregation Study?
Cost segregation is an IRS-approved strategy that reclassifies building components from longer depreciation periods (27.5 or 39 years) to shorter ones (5, 7, or 15 years). This accelerates deductions, reduces current taxes, and improves cash flow — especially with permanent 100% bonus depreciation.
In Simple Terms
We analyze your property to identify non-structural elements (e.g., lighting, carpeting, cabinetry) and land improvements (e.g., parking lots, landscaping) that qualify for faster depreciation. Instead of waiting decades for deductions, you claim them upfront.
The Goal
Shift as much basis as possible to 5/7/15-year classes for immediate tax savings and stronger cash flow.
Eligible Properties
Any commercial real estate purchased, constructed, renovated, or improved since 1987. Studies are cost-effective for properties $500k+ (often profitable down to $200k). Common types include:
- Apartments & Multifamily
- Offices & Medical Facilities
- Retail & Restaurants
- Hotels & Self-Storage
- Warehouses & Manufacturing
- Gas Stations & Car Washes
Key Benefits
- Maximize Year 1 deductions with 100% bonus depreciation
- Reduce current tax liability
- Free up cash for reinvestment
- Potential property tax savings in some jurisdictions
- Audit-defensible reports backed by engineering expertise
Ready to See Your Savings?
Request a free preliminary estimate — we’ll show projected benefits within 48 hours.
Bldg Type: Dental Center
Bldg Cost: 688K
Year Acquired: 2013
Increase Cash Flow: $93,000
Bldg Type: Multi Family
Bldg Cost: $3.1 MIL
Year Acquired: 2022
Increase Cash Flow: $409,000
Bldg Type: Warehouse
Bldg Cost: $2MIL
Year Acquired: 2021
Increase Cash Flow: $193,000
Bldg Type: Veterinary
Bldg Cost: 700K
Year Acquired: 2022
Increase Cash Flow: $78,000
Bldg Type: Strip Center
Bldg Cost: $1.2MIL
Year Acquired: 2021
Increase Cash Flow: $232,000
Bldg Type: Bank
Bldg Cost: 503K
Year Acquired: 2021
Increase Cash Flow: $74,000
Bldg Type: Medical
Bldg Cost: $3.6MIL
Year Acquired: 2022
Increase Cash Flow: 322,000
Bldg Type: Office Condo
Bldg Cost: $1.9MIL
Year Acquired: 2021
Increase Cash Flow: $241,000