Cost Segregation
Unlock Hidden Tax Savings & Increase Cash Flow
Accelerate Tax & Business Services provides engineering-based cost segregation studies designed to identify assets that may qualify for shorter recovery periods, accelerate depreciation deductions, and support audit-ready tax reporting.
Estimate your savings in minutes: Use our interactive calculator to see your potential tax benefits.
Understanding Cost Segregation
A cost segregation study is an IRS-recognized tax strategy that identifies assets that may qualify as personal property or land improvements for federal depreciation purposes. Instead of depreciating your entire building over 27.5 or 39 years, certain components can be depreciated much faster.
Through detailed engineering and cost analysis, qualifying assets are identified and assigned shorter recovery periods under federal tax guidelines.
These include non-structural building components (like specialty electrical, flooring, millwork, and decorative finishes), exterior site improvements (parking lots, landscaping, signage), and certain non-structural components, dedicated systems, and site improvements that may qualify for 5-, 7-, or 15-year recovery periods, depending on the facts and circumstances.
Primary Benefits
Accelerated Depreciation Strategy
The primary goal of a cost segregation study is to identify all construction-related costs that can be depreciated over a shorter recovery period (typically 5, 7, or 15 years) rather than the traditional 27.5 or 39 years. This IRS-recognized approach generates accelerated depreciation deductions, creates larger deductions in the early years of ownership, and ultimately frees up cash for reinvestment and growth.
Accelerated Depreciation Deductions
Reclassify assets into shorter recovery periods (5, 7, or 15 years) to maximize early-year deductions and reduce current tax liability.
Improved Cash Flow
Reduce current tax obligations and free up capital for operational needs, expansion initiatives, or strategic investments.
Retroactive Application
A cost segregation study can be applied to properties placed in service in prior years to capture missed depreciation using an IRS-approved §481(a) catch-up adjustment—without amending prior returns.
Beyond Tax Savings
Additional Benefits
In some cases, the asset-level detail developed during a cost segregation study may also support related planning efforts, including fixed asset review, insurance documentation, and property tax discussions, depending on the jurisdiction and use case.
- Detailed asset-level documentation for fixed asset records
- Supporting data for insurance coverage discussions
- Information that may assist with property tax appeals in some jurisdictions
- Comprehensive records for future due diligence or disposition planning
By The Numbers
Typical Results From Cost Segregation
25–35%
On average, 25%–35% of total property cost is reclassified into 5, 7, or 15-year depreciation categories.
$2M+
A $2M property may generate substantial first-year depreciation deductions depending on asset mix, placed-in-service date, and depreciation assumptions.
Year 1
Benefits are realized immediately—accelerated deductions reduce your current-year tax liability.
*Results vary based on property type, acquisition date, and construction details. Contact us for a personalized estimate.
Industry Applications
Property Types We Serve
Cost segregation delivers significant benefits across virtually all commercial and residential property types.
Multi-Family Apartments
Typically 30%+ reclassification potential
Office Buildings
Strong results for tenant improvements
Retail & Shopping Centers
High fixture and site improvement content
Hospitality & Hotels
Often 35%+ due to FF&E and finishes
Medical & Dental Offices
Specialized equipment qualifies
Industrial & Warehouse
Site improvements often overlooked
Our Methodology
The Process
1
Document Review
Analyze construction costs, architectural drawings, invoices, and fixed asset records.
2
Site Inspection
Conduct comprehensive property walkthrough to identify qualifying assets.
3
Asset Reclassification
Assets are analyzed and classified into appropriate MACRS recovery periods (5, 7, or 15 years) based on IRS guidance and engineering-based cost analysis.
4
Engineering-Based, Audit-Ready Report
Deliver comprehensive documentation including an Executive Summary and, when applicable, Form 3115.
Eligibility
A cost segregation study is most effective for properties valued above $200,000 and placed in service after 1986.
Residential & Commercial Properties
New Construction & Major Renovations
Property Acquisitions & Expansions
Older Properties with IRS Catch-Up Adjustments
Getting Started
How to Proceed
The IRS favors detailed, engineering-based cost segregation studies. Work with experienced professionals to ensure compliance and audit readiness.
1
Fill Out Our Estimate Form
Complete our Cost Segregation Estimate Form with basic property details. We'll use this information to provide an initial assessment of potential benefits.
2
Schedule a Consultation
Begin with a complimentary consultation. We review your property type, project scope, and financial objectives to confirm eligibility and potential benefits.
3
Provide Documentation
Submit available construction costs, architectural drawings, or fixed asset schedules. Even limited records can be used to build a compliant analysis.
4
On-Site Review
Our specialists walk the property (or use digital documentation if needed) to identify qualifying assets, improvements, and overlooked deduction opportunities.
5
Deliver Final Report
You receive an engineering-based, audit-ready report with complete asset reclassifications, depreciation schedules, and IRS documentation for seamless filing.
Why Choose Us
Engineering-Based, Audit-Ready Studies
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Engineering-Based Cost Segregation Studies
Our studies are prepared by specialized cost segregation professionals and reviewed in coordination with your CPA or tax advisor for technical accuracy.
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Audit-Ready Documentation
We provide comprehensive documentation that meets IRS requirements and supports your filing with Form 3115 preparation.
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Works With Your CPA
Keep your existing accountant—we collaborate seamlessly with your tax team and provide all necessary supporting schedules.
Real Results
Case Study
Multi-Family Apartment Complex
Dallas, TX
Property: 150-unit apartment complex acquired in 2019
Purchase Price: $18.5 million
Reclassification: Approximately 27% of depreciable basis identified as assets with shorter recovery periods
$2.5M
Assets Reclassified
$420K
Estimated First-Year Depreciation Increase
"The study identified substantial first-year depreciation benefits, and the documentation gave our CPA the support needed for filing."
Results will vary based on asset mix, acquisition date, depreciation assumptions, and taxpayer circumstances.
Ready to see whether your property qualifies for accelerated depreciation?
Schedule a complimentary assessment to estimate potential reclassification opportunities and determine whether a cost segregation study makes sense for your property. Engineering-based, audit-ready reports.
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