A cost segregation study identifies building components eligible for shorter depreciation periods, helping owners claim qualifying deductions sooner. Engineering-based studies add property inspection, component-level cost analysis, and documented support for asset classifications. That detail helps explain what qualifies, how it was valued, and why its depreciation treatment is supported.
Cost segregation identifies and separates qualifying personal property and land improvements from a building’s depreciable basis. Eligible components may receive 5-, 7-, or 15-year recovery periods, while the remaining building generally retains its 27.5-year residential rental or 39-year nonresidential recovery period. Land is not depreciable.
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Cost segregation studies can evaluate purchased, newly constructed, or renovated income-producing properties. Common property types include multifamily housing, hotels, offices, retail, industrial buildings, self-storage facilities, restaurants, and healthcare properties.
Apartment buildings, rental communities, and multifamily developments.
Cost segregation for multifamily propertiesProfessional offices, corporate buildings, and owner-occupied business properties.
Hotels, resorts, and other income-producing lodging properties.
Cost segregation for hotelsShopping centers, standalone retail buildings, and storefront properties.
Restaurant buildings, food-service properties, and related improvements.
Warehouses, distribution centers, and manufacturing facilities.
Self-storage facilities, climate-controlled units, and multi-building storage properties.
Cost segregation for storage facilitiesMedical offices, clinics, and specialty healthcare facilities.
The same property analysis serves different planning needs: identifying eligible depreciation for owners, documenting project costs for developers, and providing supporting schedules for CPAs and tax advisors.
Support client tax planning with documented asset classifications, valuations, and depreciation schedules. Coordinate the study with return preparation while maintaining the client relationship.
Explore CPA resourcesIdentify qualifying components in new construction and renovations. Reconcile construction costs and supporting records to evaluate shorter recovery periods as projects enter service.
Explore developer resourcesEvaluate depreciation opportunities for acquired, improved, or existing properties. Review the estimated benefit and study cost with your CPA to determine whether a study fits your ownership plans.
Explore owner resourcesChoosing a cost segregation company means evaluating how the study is performed, what the report documents, and how the findings support your CPA. With 20+ years of experience and 30,000+ completed studies, CSA Partners brings engineering and construction expertise to properties nationwide. Our approach connects property inspections, component valuations, and documented asset classifications.
SiteWizeâ„¢ captures measurements, photographs, and construction details during property inspections. These records document the components observed at the property and give our engineers property-specific information for the study.
Our engineers evaluate building components, their function, and their costs to support asset valuations and depreciation classifications. The analysis connects field observations with construction knowledge and the reasoning behind the study’s findings.
Our studies are designed around the IRS Cost Segregation Audit Techniques Guide, with documentation supporting asset classifications and valuations. No-cost audit support backs the completed study, subject to the applicable service agreement.
We coordinate with your CPA or tax advisor on study findings, supporting schedules, and implementation questions. This helps your advisor evaluate the results within your broader tax and filing strategy. Explore cost segregation resources for CPAs
Get answers about study costs, timing, existing properties, engineering methodology, documentation, and coordination with your CPA.
A cost segregation study identifies and values qualifying personal property and land improvements within a real estate property’s depreciable basis. Eligible assets may receive shorter recovery periods, commonly 5, 7, or 15 years.
The remaining building generally retains its applicable recovery period. An engineering-based study documents the property components, costs, and reasoning supporting the classifications.
CSA Partners study fees begin at $3,000 and vary with the property’s size, complexity, available documentation, and engagement scope.
Before engagement, a no-cost Benefit Analysis outlines the estimated depreciation opportunity and study fee so you can evaluate the economics with your CPA.
Consider a study when purchasing, constructing, or renovating income-producing property. Coordinating early can help organize cost records and plan the analysis before tax filing.
A study can also evaluate a property already in service. The appropriate timing depends on the property, available records, filing deadlines, and your tax circumstances.
Yes. An existing property may be evaluated through a look-back cost segregation study. When eligible, missed depreciation may be addressed through an accounting method change using IRS Form 3115 and a catch-up adjustment, rather than amending each prior-year return.
Your CPA should determine the applicable filing procedure, eligibility, and treatment of the adjustment.
A study does not guarantee that a return will or will not be selected for examination. The IRS addresses cost segregation methodology and documentation in its Cost Segregation Audit Techniques Guide.
Engineering-based analysis provides support for how assets were identified, valued, and classified. CSA Partners includes no-cost audit support for its completed studies.
CSA Partners studies typically take 3–4 weeks from engagement to final report delivery, depending on property complexity, document availability, and inspection scheduling.
The process includes document collection, property analysis, inspection when applicable, engineering analysis, and report preparation. Ask about expedited availability if you have a specific deadline.
Common starting documents include the property address, acquisition and placed-in-service dates, closing statement, current depreciation schedule, and available construction or renovation costs.
Drawings, invoices, and detailed cost records can support the analysis. If records are incomplete, the study team can identify what additional information is needed.
It may, but a near-term sale requires a review of the overall economics. Potential deductions should be evaluated alongside the study fee, expected sale timing, and depreciation recapture.
Coordinate the study and any proposed exit strategy with your CPA before proceeding. You can also learn about CSA Partners’ 1245 Exchange® service and discuss whether it is appropriate for your circumstances.
Engineering adds property-specific analysis of building components, their function, and their costs. Inspection records, measurements, photographs, and cost analysis support the resulting asset classifications and valuations.
CSA Partners uses SiteWize™ to capture property details and connects that evidence to the study’s engineering analysis and supporting documentation.
Not necessarily, but identifying a deduction does not mean it can be used immediately. Accelerated depreciation may create or increase a loss, and applicable tax limitations determine when that loss can be used.
Your CPA should evaluate your basis, at-risk, passive activity, and other applicable loss limitations before estimating current-year cash tax savings.
Personal-use residences, land, and property held primarily for sale as inventory generally are not candidates for depreciation-based cost segregation benefits. Mixed personal and business use requires a separate review.
A smaller investment property may qualify, but the expected benefit should justify the study fee. A no-cost Benefit Analysis helps evaluate whether a full study makes financial sense.
Start with a no-cost Benefit Analysis to review your property’s estimated accelerated depreciation opportunity and study fee. Understand the potential benefit before deciding whether to move forward with an engineering-based study.
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