The government and IRS allow property owners to take a deduction for the wear and tear of their business property. The default method to depreciate a building is over 27 and a half years for residential properties or 39 years for commercial properties and short-term rentals. But not everything at the property should be depreciated over such a long depreciable life. Things like carpeting, specialty electrical work, parking lots, and certain fixtures can legally be reclassified into much shorter recovery periods such as five, seven, or fifteen years.

The process of identifying, valuing, and properly classifying the assets is called a cost segregation study. The result is that instead of spreading your deductions evenly over decades, you take a much larger deduction earlier in the asset’s life. When completed correctly, it results in immediate increased cash flow and tax savings that can be reinvested.

Fees vary with the size and complexity of the property, but the number that matters is return on investment: tax savings are typically many times larger than the fee. We start every engagement with a free feasibility review, so you see the expected savings and the exact cost side by side before committing to anything.

Most studies take 4 to 6 weeks from kickoff to a final, delivered report; larger or more complex properties can take longer. You’ll have a direct line to the person doing the work throughout, not a rotating cast of contacts.

No. Cost segregation is a well-established, IRS-recognized method used by property owners nationwide every year. What matters is documentation quality, the IRS has published its own audit techniques guide, and we build every study to that standard.