Frequently
Asked Questions

Cost segregation is a proven tax strategy that lets commercial and residential rental property owners accelerate depreciation, increase cash flow, and defer taxes.

We recommend for a client to hold a property for a minimum of 3-5 years in order for cost segregation to make sense.

Any type of commercial property will qualify for a cost segregation study. Also, any size property will qualify. However, the cost-to-benefit breakdown may not be as favorable. Commercial buildings and leasehold improvements with a cost basis of $300,000 will qualify for a cost segregation study. This value drops to the $150,000 range when considering cost segregation for residential rentals. Contact us for a complimentary proposal.

Most commercial or residential rental property can qualify—but the larger the cost basis, the more powerful the tax benefits.

Complimentary Proposal

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The best time is in the first year of ownership—but if you’ve owned the property for under 10 years, you can still catch up on missed depreciation without amending past returns (using IRS Form 3115). Cost Seg America helps you get the full tax benefits no matter when you start.

The cost depends on the size, type, and complexity of your property. We price each study based on time, materials, and similar projects we've completed.

Call 888-865-4401 to discuss fees in further detail.

Thanks to the Tax Cuts and Jobs Act (TCJA), real estate investors who purchased property on or after September 28, 2017, can now take major tax write-offs—even on used buildings. This law allows you to accelerate depreciation on parts of your building through a cost segregation study, turning long-term deductions into immediate cash flow.From 2017 to 2022, you could deduct 100% of qualifying assets in the first year. That percentage steps down over time:

Bonus depreciation is a once-in-a-generation opportunity to legally supercharge your tax savings—make sure you capture it before it’s gone.

While the IRS does not formally endorse cost segregation studies, it does recognize them when properly conducted. The IRS Cost Segregation Audit Techniques Guide outlines acceptable methodologies, with Method #1 (Detailed Engineering from Actual Cost Records) and Method #2 (Detailed Engineering Cost Estimate Approach) considered the most reliable. The IRS expects these studies to be performed by qualified professionals—such as engineers or construction cost specialists—using thorough and well-documented approaches.

A Cost Segregation Study normally takes around 60 days – 75 days to complete.

Cost segregation isn’t just a simple tax move—it’s a specialized process that requires deep knowledge of construction components and IRS methodologies. Most CPAs aren’t trained to break down a building’s structure for accelerated depreciation, which is why smart CPAs partner with Cost Seg America to unlock these powerful tax-saving strategies for their clients.

Our team uses the top two methodologies approved by the IRS Cost Segregation Audit Technique Guide: (1) Detailed Engineering Approach from Actual Cost Records and (2) Detailed Engineering Cost Estimate Approach. We also provide 100% audit defense at no extra cost. When your CPA works with us, they gain a trusted partner who documents every detail, giving you—and them—confidence and peace of mind.

No. Our Fully Engineered and Accounted Cost Segregation Study will not trigger an IRS audit. The methodology used by the Cost Seg America team is built to meet the highest IRS standards — thorough, defensible, and backed by over two decades of experience. And in the rare event of an audit, we stand by our work with lifetime audit support at no additional cost.

No—and the difference can cost you real money.Many providers rely on modeling software or residual studies that lump much of your building into vague categories like “structure” or “remaining basis.” These shortcut reports—based on Approaches #4 and #5 in the IRS Cost Segregation Audit Techniques Guide—lack detail, are more likely to draw scrutiny in an audit, and can cause you to miss out on significant tax savings.

At Cost Seg America, we take a more thorough approach using the top two IRS-recognized methodologies:

‍Approach #1: Detailed Engineering from Actual Cost Records
Approach #2: Detailed Engineering Cost Estimating

‍Our studies break down your building piece by piece—including plumbing, electrical, HVAC, and every finish—so you can write off more, much sooner. That often means tens to hundreds of thousands of dollars in early tax deductions that other studies simply miss.

Yes, you can apply cost segregation to buildings placed in service in the past. The IRS allows retroactive studies—called “look-back” studies—so you can catch up on missed depreciation using Form 3115, without amending previous returns. Cost Seg America can go back up to 10 years, helping you recover missed deductions and boost current-year cash flow.

No, An amended return is no longer necessary to fix depreciation in prior years. In place of an amended return, the IRS has issued Revenue Ruling 2004-11, which allows a taxpayer to file a Form 3115 (Automatic Change in Accounting). This allows the taxpayer to take any missed deductions in the current year.  

No. Properties placed in service as far back as 1987 may qualify for a cost segregation study. These are known as “look-back” studies. At Cost Seg America, we’ll go back up to 10 years on any property that’s been built, purchased, or renovated to help you unlock missed depreciation.