New construction is the best time for a cost segregation study. The cost records are complete, the documentation is fresh, and Cost Seg America uses IRS Approach 1 exclusively.
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There is a window of maximum opportunity in cost segregation — and it opens the moment you place a new construction property in service.
For a newly completed building, every cost is documented: the contractor's schedule of values, the architect's pay applications, the subcontractor invoices, the materials takeoffs. Every number is traceable, verifiable, and defensible.
For new construction, Cost Seg America uses IRS Approach 1 exclusively — direct cost identification from construction documentation. We trace every component to the contractor's schedule of values, confirm quantities against architectural plans, and assign each element to its correct IRS asset class. The result is a study that cannot be challenged on cost basis, because every number came directly from the construction record.
The study should be commissioned before the certificate of occupancy — ideally during construction, while the contractor is still on site.
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 uses IRS Approach 1 exclusively on new construction — direct cost identification from the contractor's schedule of values, subcontractor invoices, and architectural plans. The construction records for a new building are the most complete and accurate cost documentation that will ever exist for that property. Our engineering team traces every component to the original cost record. This is the most defensible cost segregation methodology available.
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 new construction 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 new construction is 20–45% of the depreciable basis. On a $12M property, this translates to approximately $1,208,000 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.