Inside every office building is a web of components the IRS has specifically assigned to 5-year and 7-year recovery — and most owners depreciate all of it at 39 years.
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Office buildings look simple on the surface. But inside every commercial property is a network of components the IRS has specifically assigned to 5-year and 7-year personal property and 15-year land improvements — and most building owners have never captured any of them.
Specialty and display lighting systems, security and surveillance camera systems, access control infrastructure, carpet and resilient flooring, dedicated tenant electrical panels — all of these are personal property under Rev. Proc. 87-56. They depreciate over 5 years or 7 years, not 39. With 100% bonus depreciation active in 2025, they are fully deductible in Year 1.
The parking lot, landscaping, sidewalks, and exterior lighting around your building are 15-year land improvements — also 100% bonus depreciable.
On a $5 million office building, a fully engineered study typically finds $800,000–$1.5 million in assets that belong on accelerated schedules. That is engineering documentation, backed by component-level cost analysis, defensible under IRS examination.
These are the IRS-verified asset classes under Rev. Proc. 87-56 and supporting case law — confirmed across 16,000+ studies. Every component is documented to its correct recovery period with engineering justification, defensible under IRS examination.
Cost Seg America engineers commercial office cost segregation studies on properties from 5,000 square feet to 500,000 square feet. The 5-year and 7-year personal property in a commercial office building — specialty lighting, security infrastructure, dedicated electrical, access control — is documented component by component. Every suite. Every floor. Every system.
The IRS publishes a 347-page Audit Technique Guide on cost segregation. It identifies Approaches 1 and 2 as the preferred methodologies. Studies priced under $2,900 recover $60,000–$150,000 less per $1 million of depreciable basis than a fully engineered study. Cost Seg America has used IRS Approaches 1 and 2 on every study for 24 years. 125+ IRS audits. Zero losses. $0 ever returned. The methodology is why.
Cost segregation is an IRS-approved engineering analysis that reclassifies components of your commercial office property from the default 39 yr straight-line depreciation schedule to three shorter recovery periods: 5-year personal property, 7-year personal property, and 15-year land improvements. Every component that qualifies for an accelerated schedule is individually identified, measured, and documented.
With 100% bonus depreciation active under OBBBA for property placed in service after January 19, 2025, every qualifying 5-year, 7-year, and 15-year component can be fully deducted in Year 1. Cost Seg America consistently recovers $60,000–$150,000 more in deductions per $1 million of depreciable basis than studies priced under $2,900.
The typical reclassification rate for commercial office is 20–35% of the depreciable basis. On a $5M property, this translates to approximately $399,600 in Year 1 federal income tax savings at a 37% rate. Actual results vary based on the specific property, construction type, and individual tax situation.
The One Big Beautiful Budget Act (OBBBA) restored 100% bonus depreciation for qualified property placed in service after January 19, 2025. With 100% bonus depreciation, every qualifying 5-year, 7-year, and 15-year component identified in your study is fully deductible in the year you place the property in service. Your CPA determines your eligibility based on your individual tax situation, passive activity rules, and other factors.
Yes. The IRS allows you to go back and claim deductions you never took on prior-year properties using a Form 3115 change in accounting method — without amending previous returns. The catch-up deductions are taken entirely in the current tax year. Cost Seg America applies lookback analysis as standard practice. We partner with a trusted CPA specialist who handles the Form 3115 filing.
Cost Seg America's minimum qualifying property value is $200,000. Below this threshold, the engineering cost typically exceeds the tax benefit. Above $200,000, the fee-to-benefit ratio is consistently favorable and grows substantially with property value.
Unlimited audit defense means if the IRS examines your cost segregation study — this year, five years from now, or ten years from now — Cost Seg America responds. Written responses and phone representation. No time limit. No hour cap. No additional fee. Ever.
In 24+ years and 125+ IRS audits, Cost Seg America has never lost an audit and has never returned a dollar to the IRS.
Cost Seg America doesn't just find the deductions — we document them to survive the most demanding IRS examination.