Cost segregation is a tax strategy that pulls property-related depreciation costs forward into the first year - instead of waiting 27.5, or even 39 years. The study identifies the parts of your property that will depreciate over 5, 7 and 15 year periods, allowing you to claim 100% of those deductions in year one.

On average, 25% of the depreciable basis can be pulled forward to year one, instead of about 3.6% (for a 27.5 year property) or 2.5% (for a 39 year property).

Let’s say you have a $920k house with $95k of land value and $825k depreciable basis. With a cost segregation study, you could claim a depreciation deduction of $206k in year one instead of $30k, which is an incremental $176k. At a 35% effective tax rate, this would reflect a tax savings of ~$62k, minus the cost of the study.

*The above assumes a 27.5 year property. If it is a 39 year property, then the incremental deduction is $9k more in year one (a $185k deduction).

While most cost segregation studies take months to complete, Cost Seg Pro’s official studies are ready in just one day. Simply answer a few questions about your property and we’ll handle the rest.

Absolutely. A cost segregation does not increase your likelihood of being audited.

Your study also comes with an Audit Protection plan. In the off-chance that your cost segregation is audited, we will take care of up to $10,000 of audit related costs, including any necessary site visits.

The property needs to be qualified as an “investment property” on your tax return. If it is your primary or secondary home, it is not eligible.

In that case, the loss would be carried forward to offset profit generated in future years. Your deduction is only able to offset the taxes you will pay and cannot result in paying negative taxes.