Frequently Asked Questions

Comprehensive audit support is provided at no additional cost with every study. This coverage includes full IRS audit defense with written responses to any IRS inquiries and expert witness testimony if needed. Our team maintains direct communication with your CPA throughout any audit process and provides complete documentation of our methodology. This support continues for as long as the study remains valid, regardless of how many years pass.

Our track record speaks to the quality of our work, with over 10,000 studies completed and less than 0.1% ever being audited. We maintain a 100% success rate in defending the audits that have occurred. Both Rapid and Engineered reports are equally defensible, and recordings of virtual inspections are available as evidence if ever needed.

While there's technically no limit to how far back you can perform a look-back study, practical considerations apply. You can capture depreciation from all open tax years, typically the most recent three years, and can even capture benefits from closed years through a Section 481(a) adjustment on Form 3115. However, documentation availability tends to decrease over time, making older studies more challenging.

The cost-benefit analysis becomes less favorable for older properties since depreciation already taken reduces the remaining benefit. The recommended approach is to focus on properties placed in service within the last 15 years, prioritizing higher-value properties first. You should evaluate the remaining depreciable life of the property and confirm that adequate documentation is available before proceeding with older properties.

Depreciation amounts vary significantly based on property type and specific characteristics. Typically, a cost segregation study can reclassify 20-30% of a property's depreciable basis to shorter recovery periods. Residential properties usually see 15-25% acceleration, while commercial properties often achieve 20-35% acceleration.

Properties with significant improvements can see even higher percentages. Several factors affect these results, including land value allocation where lower allocations provide better results, the quality of finishes and fixtures throughout the property, the presence of specialized systems, the amount of site improvements like parking and landscaping, and any recent renovations or capital improvements that have been made.

Bonus depreciation allows immediate expensing of qualifying assets identified in your  property through a cost segregation study. Under current law, known as the Big Beautiful Bill, properties acquired after January 19, 2025, qualify for 100% bonus depreciation through December 31, 2029. This applies to all 5, 7, and 15-year property classifications identified in the study.

For properties acquired before this new law, bonus depreciation followed a phase-out schedule:100% for assets placed in service between 2018 and 2022, 80% for 2023, and 60% for 2024.

If you did not take advantage of bonus depreciation in a prior year, a cost segregation study can still unlock those benefits retroactively. By filing a Form 3115 with the IRS, you can “catch up” on missed depreciation — including bonus depreciation — in the current tax year without amending past returns.

The virtual inspection is an essential part of the Fully Engineered Study, designed to be both thorough and convenient. It is conducted over a video call (via platforms such as Google Meet or Zoom) and typically lasts 30–60 minutes, depending on the property’s size.

During the session, a person with property access — such as a property manager, tenant, or contractor — uses a smartphone to guide our Site Visit Specialist through the property. The specialist provides step-by-step instructions to ensure all necessary areas and components are properly documented.

For those who prefer an in-person visit, we also offer an on-site inspection option starting at $600, depending on the property's size and complexity.

The documentation requirements for a cost segregation study are straightforward. Essential documents include your closing statement or HUD-1 settlement statement, any existing depreciation schedule, and a cost ledger for capital improvements in spreadsheet format.

While not required, several documents can be helpful if available, including property appraisals, floor plans or architectural drawings, photos of the property. You don't need to provide individual receipts, though you should keep them for backup purposes.

There are two study options based on property characteristics. The Rapid Report ($950) suits properties with depreciable basis under $800K, capital improvements under $50K, and residential properties under 3,500 sq ft—ideal for single-family homes, condos, and small multifamily. It uses a detailed questionnaire instead of inspection, with 5-10 business day turnaround.

The Fully Engineered Study (from $2,800) is required for properties exceeding these limits, all commercial properties regardless of size, and renovations over $50K. It includes virtual or on-site inspection with detailed component analysis and takes 15-20 business days. The key difference is methodology: Rapid Report uses software-based questionnaire analysis while Fully Engineered includes comprehensive site inspection, document review, and detailed engineering analysis. Both are IRS-compliant with full audit protection.

No minimum requirements exist. We welcome all professionals to our program, whether you're a solo CPA or a large firm seeking to white-label cost segregation studies under your brand.

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