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Cost Segregation, Explained.
No Fluff. Just Facts.

Articles on cost segregation methodology, bonus depreciation, IRS audit defense, property types, and tax planning strategy. Written by the Cost Seg America team.

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The Section 481(a) Adjustment: How the Form 3115 Catch-Up Mechanism Actually Works for Cost Segregation Lookbacks

The Section 481(a) adjustment lets property owners claim years of missed accelerated depreciation in a single tax return through Form 3115. Here is how it works.

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Cost Segregation

The Section 481(a) Adjustment: How the Form 3115 Catch-Up Mechanism Actually Works for Cost Segregation Lookbacks

The Section 481(a) adjustment lets property owners claim years of missed accelerated depreciation in a single tax return through Form 3115. Here is how it works.

Cost Segregation

Material Participation Rules: How Property Owners Convert Passive Cost Segregation Losses Into Ordinary-Income Deductions

The seven IRS material participation tests determine whether cost segregation losses are passive or non-passive. Here is how to document the position properly.

Cost Segregation

Cost Segregation on Inherited Property: The Step-Up in Basis Strategy Most Heirs Miss

Inherited property receives a step-up in basis to fair market value at death. Cost segregation on that new basis produces seven-figure Year 1 deductions.

Cost Segregation

Tenant Improvements and Cost Segregation: How Commercial Landlords Recover 25 to 35 Percent of TI Capital in Year 1 Federal Tax Savings

Tenant improvements properly classified as Qualified Improvement Property plus cost segregation produce Year 1 deductions worth 25 to 35 percent of TI capital.

Cost Segregation

Partial Asset Disposition: The Tax Deduction Most CPAs Miss When You Replace Major Building Components

Partial asset disposition lets property owners claim the remaining undepreciated value of replaced components as an immediate Year 1 deduction. Most CPAs miss it.

Cost Segregation

The Short-Term Rental Cost Segregation Loophole: How High-W-2 Earners Are Using It to Offset Salary Income

The short-term rental cost segregation strategy lets high-W-2 earners offset salary income with depreciation deductions. Here is how the regulations work.

Cost Segregation

When NOT to Do a Cost Segregation Study: Honest Cases Where the Math Does Not Work

Cost segregation works for most commercial properties, but not all. Here are the specific scenarios where the math does not justify the work and what to do instead.

Cost Segregation

How Much Does a Cost Segregation Study Cost (And Why the Cheap End of the Market Produces a Different Product)

Cost segregation study fees range from $2,000 to mid-five figures. Here is what drives the fee, what each tier produces, and whether the price tag justifies itself.

Cost Segregation

Cost Segregation for Real Estate Professionals: How REPS Transforms the Math on Your Rental Portfolio

Real Estate Professional Status transforms cost segregation deductions from passive losses into immediately usable ordinary losses. Here is how REPS works.

Cost Segregation

Depreciation Recapture After a Cost Segregation Study: The Plain-English Math

Depreciation recapture on the sale of a property after a cost segregation study is a math problem with a clear winner. Here is the plain-English version.

Cost Segregation

1031 Exchanges and Cost Segregation: How They Work Together on Your Replacement Property

1031 exchanges defer capital gains. Cost segregation accelerates depreciation. Here is how the two strategies work together and what changes on the replacement property.

Cost Segregation

New Construction vs Acquired Property Cost Segregation: How Methodology Changes Between IRS Approaches 1 and 2

New construction and acquired property use different cost segregation methodologies. Here is how IRS Approaches 1 and 2 work and which one fits your property.

Cost Segregation

100 Percent Bonus Depreciation Under the One Big Beautiful Bill Act: What Commercial Property Owners Need to Know

The OBBBA restored 100 percent bonus depreciation permanently. Here is what the new rules cover, who qualifies, and how to claim every dollar the law authorizes.

Cost Segregation

Section 1245 vs Section 1250 Property: What Every Commercial Property Owner Needs to Know

Section 1245 and Section 1250 are the two tax code sections that decide how every commercial property is depreciated and taxed at sale. Here is what each one means.

Cost Segregation

The Whiteco 6-Factor Test: How the IRS Decides What Qualifies for Accelerated Depreciation

The Whiteco 6-Factor Test is the IRS framework that decides whether a building component qualifies for accelerated depreciation. Here is how it works.

Cost Segregation

Form 3115 Lookback Studies: How to Recover Missed Cost Segregation Deductions

Owned your commercial property for years without a cost segregation study? Form 3115 lets you claim every missed deduction in a single year. Here is how it works.

Cost Segregation

What Is Cost Segregation? The Complete Property Owner's Guide

Cost segregation is a tax strategy that lets you depreciate commercial real estate faster than the 39-year default. Here is exactly how it works and what it means for your tax bill.

Cost Segregation

What the IRS Audit Technique Guide Actually Says About Cost Segregation

The IRS publishes a 347-page Audit Technique Guide on cost segregation. Here is what it says, the methodologies it prefers, and why it matters.

Cost Segregation

What Does the IRS Think About Cost Segregation?

The IRS does not just allow cost segregation. It publishes a 347-page guide telling its own examiners how to evaluate it. Here is what that means for you.

Cost Segregation

The History of Cost Segregation: From the 1962 Investment Tax Credit to 100% Bonus Depreciation Today

Cost segregation traces back to the 1962 Investment Tax Credit. Here is how it became standard practice in commercial real estate tax planning.