Your building is not one asset. It’s hundreds, and most of them depreciate much faster than 39 years.

A cost segregation study identifies every component of your property that qualifies for 5-, 7-, or 15-year treatment. With 100% bonus depreciation now permanent, those components can often be deducted in full in year one. Start with a free feasibility analysis; proceed only if the math clearly works.

Schedule K&A — Cost Segregation §168(k)

Property basis$2,000,000

Reclassified (5/7/15-yr)28%

Bonus depreciation100%

Placed in serviceyear 1

Study standardIRS ATG

Year-one deduction$560,000

ENGINEERING BEHIND EVERY COMPONENT — FEASIBILITY BEFORE YOU COMMIT

Standard depreciation is the slowest legal way to recover your investment.

Buy an investment property and, by default, you deduct the building over 27.5 years for residential or 39 years for commercial. But a building isn’t a single asset. Flooring, specialty electrical and plumbing, cabinetry and millwork, appliances, parking lots, sidewalks, fencing, and landscaping are, under the tax code, 5-, 7-, and 15-year property. Left inside the 39-year bucket, they’re deducted at a fraction of the pace the law allows.

Commonly, 20 to 35 percent of a property’s cost basis can be reclassified into short-life categories, depending on the property type. On a $2 million property, that’s several hundred thousand dollars moving from a 39-year schedule to year one. That’s not aggressive; it’s the correct application of the rules, documented by engineering.

If you own the building, the study probably pays for itself.

Rental and short-term rental owners

Single-family rentals in volume, multifamily, and short-term rentals, especially where the owner materially participates.

Commercial property owners

Office, retail, industrial, medical, and hospitality buildings.

Owner-occupied business real estate

Business owners who own the building their company operates from.

Owners of existing property

Properties bought in prior years that were never studied; missed depreciation can be caught up now.

Anyone building or renovating

Renovations, tenant improvements, and new construction.

The study, the elections, and the return that makes it land.

Free feasibility analysis. A no-cost estimate of the reclassification, the first-year deduction, and the fee, so you only proceed when the numbers clearly justify it.

Engineering-based study. Detailed studies that meet IRS Audit Techniques Guide standards, with component-level documentation, photographs, and cost data.

Election strategy. Bonus depreciation elections, Section 179 coordination, and correct placed-in-service treatment.

Look-back studies. Catching up missed depreciation on property you already own through a Form 3115 accounting method change, taken in the current year with no amended returns.

Integration with your return. Making sure the deduction actually lands: passive activity rules, real estate professional status, the short-term rental exception, and grouping elections.

Exit modeling. Modeling depreciation recapture and the effect on a future sale or exchange, so the strategy fits your hold period.

Three steps, and the first one costs nothing.

01

Feasibility

Send us the purchase price, closing statement, property type, and a few details. We estimate the reclassification and the fee. No cost, no obligation.

02

The study

Site information, construction and cost data, and engineering analysis produce a component-by-component report that assigns each asset its correct recovery period.

03

The return

We apply the study to your return with the right elections, address passive-loss rules, and file Form 3115 for look-back studies. The deduction shows up where it’s supposed to: on your tax bill.

The study and the return, from the same desk.

The study and the return, together. Many cost segregation firms deliver a report and leave. The report is worthless if the deduction gets stranded by passive-loss rules or misapplied on the return. We handle the study and the return, so the savings actually arrive.

Honest feasibility. We run the feasibility numbers first and tell you honestly when a study isn’t worth it. Not every property justifies one.

The author of the playbook. Jesse wrote the Amazon #1 best seller on the 2025 law that made 100% bonus depreciation permanent. Cost segregation is the strategy that law rewards most, and it’s home turf.

Built for scrutiny. Studies are documented to the IRS Audit Techniques Guide standard and prepared by a CPA who also holds Enrolled Agent representation rights.

Questions we’re asked before the first call.

Is cost segregation worth it for my property?

Usually worth investigating if your cost basis is above roughly $500,000, or if you’ve built or renovated. Our free feasibility analysis estimates the deduction and the fee so you can decide with real numbers. Sometimes the answer is no, and we’ll say so.

How does cost segregation work with bonus depreciation?

Cost segregation identifies the components that qualify for 5-, 7-, and 15-year recovery. Bonus depreciation lets you deduct 100% of those qualifying components in the year the property is placed in service. Under the 2025 tax law, that 100% rate is permanent for qualifying property acquired after January 19, 2025. Together, they move a large share of your building’s cost into year one.

Can I do a cost segregation study on a property I bought years ago?

Yes. A look-back study calculates the depreciation you should have taken and catches it up in the current year through a Form 3115 accounting method change. No amended returns are required. Properties acquired anytime in the last decade or more are often good candidates.

Does cost segregation work for short-term rentals?

Often very well. If you materially participate in a short-term rental and the average stay meets the IRS tests, the losses may be treated as non-passive, which means accelerated depreciation can offset your other income. The facts matter; we’ll walk through them with you.

What about depreciation recapture when I sell?

Accelerated depreciation is recaptured on sale, generally at rates that differ from long-term capital gain rates. For most investors the time value of the deduction far outweighs recapture, and a 1031 exchange can defer it entirely. We model your specific hold period so there are no surprises.

How much does a cost segregation study cost?

It depends on the property’s size and complexity, and the feasibility analysis tells you the fee before you commit. The study is only worth doing when the first-year savings clearly exceed the cost, and that’s the standard we apply.

Find out what your building is really worth on your tax return.

Send us the basics and get a free feasibility analysis. If the
math works, we’ll show you exactly how much and when.