The biggest opportunity is often outside the building — in the acres of paving, lighting, and site infrastructure that software-based studies consistently undercount.
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Industrial buildings are deceptively simple from the outside. But the engineering tells a different story.
A typical industrial property sits on 5–30 acres of site infrastructure: truck courts, parking areas, stormwater systems, exterior lighting, fencing, access roads. Every one is a 15-year land improvement — fully deductible in Year 1. On a 200,000 SF industrial building with significant truck court, the site work alone can generate $500,000–$1,000,000 in accelerated deductions.
Inside: specialized lighting, security and access control, dedicated process electrical and dock equipment foundations all qualify for 5-year treatment. Distribution center racking systems and conveyor infrastructure qualify as 7-year personal property.
The variation between industrial properties is enormous — and exactly why software-based studies consistently underperform on industrial. Engineering analysis is not optional when site work is this variable.
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 industrial cost segregation studies on properties ranging from 20,000 to 2,000,000 square feet. The 15-year land improvement opportunity on industrial sites — truck courts, access roads, stormwater systems, exterior lighting across multiple acres — is typically the largest single component of the study. Our engineering team measures every acre of the site. The variation between properties is why averages fail.
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 industrial 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 the One Big Beautiful Budget Act (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 industrial is 10–35% of the depreciable basis. On a $8M property, this translates to approximately $533,984 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. The entire deduction lands on your return in Year 1. 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.