Estimate Your Savings
Use our free calculator tool to estimate your savings from a cost seg study
How Cost Segregation Works
A building isn’t just four walls and a roof. It contains many components — like carpet, cabinetry, specialty electrical, and land improvements (sidewalks, fencing) — that may qualify for shorter tax recovery periods (e.g., 5, 7, or 15 years instead of 27.5 or 39 years).
The purpose of a cost segregation study is to identify and reclassify those shorter tax life components so you can accelerate depreciation deductions and improve cash flow. Depending on the year, qualifying assets may also be eligible for bonus depreciation, which further increases your year 1 depreciation and tax savings. Check what bonus depreciation you qualify for here.
Even without bonus depreciation, simply moving items to shorter lives will increase first-year deductions compared to straight-line 27.5 or 39 year schedules.
Cost Seg Example
| Purchase price for property | $1,000,000 |
| % of purchase price allocated to land (which is non-depreciable) | 20% |
| Depreciable basis | $800,000 |
| % of depreciable basis reclassified into shorter life categories with a cost seg | ≈ 25% |
| Assets eligible for accelerated depreciation with a cost seg | ≈ $200,000 |
| Year 1 tax savings at a 37% income tax rate with a cost seg | ≈ $74,000 |
Higher depreciation → lower taxable income → improved cash flow
Note: Actual results will depend on the specific features of your property (e.g., quality of the property, condition, year of purchase, renovation work, location, etc.).
Why Choose Us
We help real asset owners navigate the complex worlds of tax credits and incentives. Our team has 20+ years of experience performing cost seg studies.
We are unique in the market by offering a full range of cost seg services, from DIY studies for single-family residential properties to fully engineered studies for more complex properties and situations (under our sister brand MVO). We focus on delivering the highest quality reports, at a price that ensures a high ROI.
FAQs
Cost segregation is an IRS-approved tax planning strategy. An engineering-based analysis reclassifies building components into shorter depreciation lives (5, 7 and 15 years instead of 27.5 or 39 years), so you claim deductions sooner and lower your taxes in the early years of ownership.
Investors can recover up to 10% of a property's purchase price in Year 1 tax savings. Every savings figure is illustrative: results vary by property type, cost basis, tax bracket and applicable law. Get a free estimate before you commit.
This is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional.
Most income-producing properties qualify, including short-term rentals, single-family and multifamily rentals, condos, office buildings, retail centers, warehouses, hotels and medical facilities. Personal residences do not qualify. Cost Seg EZ's DIY Study covers residential properties (excluding condos) with a purchase price under $1M; the Engineer Reviewed study covers any residential property with a purchase price under $1M.
DIY Studies start at $595 per property and Engineer Reviewed studies start at $895 per property, for residential properties with a purchase price under $1M. Fully Engineered studies from our sister brand, MVO Cost Segregation, start at $2,250 for residential properties; commercial and complex properties are scoped individually.
A properly prepared, audit-defensible cost segregation study does not increase audit risk; poor-quality studies can. Every study we have delivered has been accepted by the IRS. That record describes past studies and does not guarantee the outcome of any future audit.
Yes. A look-back study recaptures missed depreciation using an IRS-approved catch-up method, filed with Form 3115 on your next tax return, without amending prior returns.
Yes. Lifetime audit protection is available as a $195 add-on per property for DIY and Engineer Reviewed studies, and it is included at no extra cost with every Fully Engineered study from our sister brand, MVO Cost Segregation. If the IRS questions a covered study, we handle the defense at no additional cost to you.