Accelerate Property Depreciation with Cost Segregation
Cost segregation is a tax strategy that helps property owners pay less tax sooner. It works by identifying parts of your building—like lighting, flooring, and parking lots—that can be depreciated faster than the standard 27.5 or 39 years. Our engineering studies typically save owners $30,000-$80,000 in taxes per $1 million in building value within the first five years.
Reduce Income Tax Liability
Our engineers identify qualifying components that may represent 20-40% of your building’s value, creating significantly larger tax deductions in the early years of ownership and potentially reducing your income tax liability by thousands of dollars annually.
Free Up Immediate Cash Flow
Access your depreciation benefits sooner rather than later, providing additional working capital that can be reinvested in your business, used for property improvements, or help fund your next real estate investment.
Save Even More with Bonus Depreciation
Take advantage of immediate write-offs for qualifying property components. Recent purchases qualify for higher bonus rates (100% for 2018-2022, 80% for 2023, 60% for 2024, 40% for 2025), dramatically accelerating your tax savings without amended returns.
Learn More
Who Qualifies for Cost
Segregation?
Eligibility
A commercial cost segregation study can benefit property owners with buildings or improvements placed in service after 1986 that have a remaining depreciable basis. Properties should have a cost basis of at least $200,000. The study works for both newly constructed buildings and properties owned for many years.
CRE Owners
Owners of multi-family buildings, offices, retail centers, medical facilities, and other commercial properties can benefit from accelerated depreciation.
Residential Rental Owners
Owners of Airbnb properties, vacation rentals, short-term, and long-term rental properties can accelerate depreciation for significant tax savings.
Recent Property Investors
Investors who purchased, constructed or made improvements since 2018 can take advantage of bonus depreciation rates up to 100%.
Property Portfolio Holders
Owners of multiple properties can apply cost segregation analysis across their portfolio to maximize tax benefits and improve cash flow.
Properties That Benefit from Cost Segregation
Cost segregation studies deliver substantial tax savings across multiple property types
by identifying building components eligible for accelerated depreciation.
Multi-Family Properties & Apartment Buildings
Retail Centers & Shopping Malls
Medical & Dental Facilities
Self-Storage Facilities
Office Buildings
Warehouses & Industrial Buildings
Short-Term Rentals & Airbnb Properties
Other Commercial Properties (Hotels, RV Parks, Auto Dealerships, and more)
How Does the Cost Segregation Study Process Work?
Our streamlined three-step process makes accessing your tax benefits simple and efficient.
No-Cost Preliminary Analysis
We analyze your property details and provide a complimentary estimate of potential tax savings based on your building’s specifics.
Detailed Engineering Analysis
Our engineers conduct an on-site inspection and review 150+ building components to identify all opportunities for accelerated depreciation, including flooring, lighting, electrical, plumbing, cabinetry, landscaping, and parking lots.
Tax Savings Delivered
You receive a detailed engineering report documenting all reclassified assets. We work directly with your CPA or tax professional to ensure proper implementation, enabling immediate tax reduction and increased cash flow.
Start Reducing Your Tax Burden Now
Discover the hidden tax benefits for your property or business with our no-cost preliminary analysis. Our experts will evaluate your eligibility and estimate your potential savings with no obligation.
Cost Segregation Insights & Case Studies
Frequently Asked Questions
What is the benefit of a cost segregation study?
A Cost Segregation study reduces a building owner’s income taxes up to $100,000 for every $1 mill in building costs. The tax savings are anywhere from 3-10% of the building cost.
What is a cost segregation study?
A cost segregation study is an engineering-based analysis that reclassifies commercial real estate components and improvements between real and personal property. This reclassification accelerates the depreciable lives from 27.5- or 39-years to 5-, 7-, or 15-years.
What real estate components can typically be accelerated through a cost segregation study?
A cost segregation study can typically accelerate depreciation on many building components, including:
- Electrical installations (e.g., dedicated computer power, special lighting)
- Plumbing systems (e.g., kitchen plumbing, bathroom fixtures)
- HVAC components
- Flooring (e.g., carpet, vinyl, tile)
- Window treatments
- Cabinetry and countertops
- Decorative finishes and millwork
- Security systems
- Fire protection systems
- Parking lot paving and lighting
- Landscaping and site improvements
- Certain building exterior components
Does my property qualify for a cost segregation study?
Your property likely qualifies if:
- It’s a commercial building or building improvements with a remaining depreciable basis
- The building or improvement cost basis is at least $200,000
- You anticipate holding the property for at least three years
When should a cost segregation study be done?
A study can be completed in the year the building or improvements are placed in service. However, it can also be done on properties acquired or constructed since 1986 without amending prior years’ tax returns.
How long does a cost segregation study take?
A cost segregation study typically takes approximately three to six weeks from the time we receive all the appropriate documentation.
What information is needed to complete a cost segregation study?
Generally, we request:
- A current tax depreciation schedule
- Building cost information
- Blueprints or architectural drawings and renovation plans, if applicable
- Access to the property for an on-site inspection and walk-through
How much can I save with a cost segregation study?
Savings vary, but within the first five years of building ownership, owners could save up to $100,000 for every $1 million in building costs.
Will a cost segregation study trigger an audit?
No, a properly conducted cost segregation study has never triggered an audit. In fact, if you are audited for any reason and the study comes into question, CSSI will defend the audit at no cost.
Can a cost segregation study be done on buildings not yet constructed?
While a full study can’t be done on unconstructed buildings, CSSI can provide estimates on tax savings from your construction budgets. A full study will be delivered when construction is complete.
