Frequently Asked Questions
Browse answers about cost segregation, real estate tax strategies, and depreciation.
Find what you need, fast.
Our studies are prepared using IRS-compliant engineering and tax methodology, and the deliverables are designed to integrate cleanly into your workflow.
You'll receive a cost segregation report with full asset classifications and a depreciation schedule formatted for direct import into tax software. Everything is documented to support your filing position and to hold up under scrutiny if needed.
If you have questions about methodology or want to walk through the report before filing, our team is available to connect directly.
We analyze the property and break costs into components, flooring, electrical, plumbing, site improvements, then reclassify eligible portions into shorter tax lives (typically 5-, 7-, or 15-year property). Those components depreciate faster than the building, which front-loads deductions into the early years of ownership.
What you'll typically see in a proposal:
- Estimated reclass: $X moved into shorter-life assets
- Potential bonus depreciation: $X (based on placed-in-service timing, purchase price, and any qualified improvements or capex)
As the advisor, you'll take those numbers and determine how they fit into your client's broader tax strategy.
If the property is income-producing (rented or used in a business) and was purchased for $300,000+, there's a strong chance cost segregation can meaningfully accelerate depreciation for your client. We can confirm fit quickly with a few basic property details. Just send it our way, and we'll come back to you fast.
No. A standard depreciation analysis assigns the entire building (minus land) to one recovery period, 27.5 or 39 years. A cost segregation study goes further. It breaks the property into individual components and assigns each to the shortest defensible recovery period based on engineering analysis and IRS guidelines.
Cost segregation study software varies by firm, but most use proprietary engineering platforms combined with industry-standard cost estimating tools like RSMeans data and Marshall & Swift. These systems help engineers assign accurate replacement costs to individual building components and map them to the correct IRS asset classes. The software matters less than the engineering methodology behind it; a credible firm follows the IRS Audit Technique Guide regardless of the tools used.
Yes. Many firms now offer a fully online cost segregation study process. At R.E. Cost Seg, the entire engagement, from document submission to engineering analysis to final report delivery, can be completed remotely. Virtual inspections using photos, video walkthroughs, and satellite imagery allow engineers to classify property components without an in-person visit. Online studies are faster and more convenient, Rapid Reports and Fully Engineered Studies are equally defensible, and recordings of virtual inspections are available as evidence if ever needed.
Yes, but you don't need to limit your search to local firms. Cost segregation is a specialized engineering discipline, and the best firms work with investors nationwide. R.E. Cost Seg serves clients in all 50 states. Property inspections can be conducted through virtual site visits, so geography is rarely a limiting factor. What matters most is the firm's engineering expertise, IRS compliance track record, and turnaround time, not proximity.
Often, yes. A look-back cost segregation study can identify depreciation that should have been claimed in earlier years. The adjustment is generally reported through Form 3115 as a change in accounting method, allowing the cumulative catch-up adjustment under §481(a) without amending each prior return. R.E. Cost Seg offers Form 3115 preparation to support this process; your tax professional should review and file the completed tax treatment with your return.