Cost Segregation Studies. Engineer-Reviewed. Audit Defense Included.

A cost segregation study is an engineering-based analysis that reclassifies between 20% and 40% of a real estate purchase price out of 27.5-year (residential) or 39-year (nonresidential) depreciation and into 5, 7, and 15-year recovery periods. Combined with 100% bonus depreciation under OBBBA for property acquired and placed in service after January 19, 2025, this produces large first-year tax deductions.

WeCostSeg pricing is transparent and competitive: Rapid Reports from $795 for residential properties under $800K depreciable basis, Fully Engineered Residential studies from $2,495, and Fully Engineered Commercial studies from $2,995. All studies include 5 years of audit defense at no extra charge. Get a free written proposal in 24 hours.

Generally yes when three conditions are met: depreciable basis above $300K, your property qualifies for 100% bonus depreciation (placed in service after January 19, 2025), and you have a way to use the losses (Real Estate Professional Status, the short-term rental loophole, or passive income to offset). Our 3-Bucket Decision Framework page walks through each scenario.

Yes. A look-back cost segregation study captures missed depreciation from prior years. You file Form 3115 (Designated Change Number 7) with your current return and take the entire Section 481(a) catch-up adjustment in the year of change. No amended returns are required. Rev. Proc. 2022-14 provides the automatic procedure.

Rapid Reports typically deliver in 5-10 business days. Fully Engineered studies typically deliver in 15-20 business days after we receive all documentation and complete the inspection. Rush turnaround is available for tax deadlines.

Cost segregation studies do not trigger audits when properly conducted. The IRS published its Cost Segregation Audit Techniques Guide (Publication 5653, updated February 2025) which describes how examiners review studies. Properly engineered studies that document the 13 Principal Elements of a Quality Study rarely face challenges. We include 5 years of audit defense with every study.

A WeCostSeg report includes the engineer's qualifications, methodology disclosure aligned to IRS Pub 5653, property description, detailed asset listings with cost basis and recovery period for each component, supporting photographs and documentation, IRC and Treasury regulation citations, and a depreciation schedule in both PDF and Excel format for your CPA.

Any income-producing property placed in service after 1986 qualifies. This includes single-family rentals, multifamily, short-term rentals (Airbnb, Vrbo), office buildings, retail, industrial warehouses, hotels and motels, restaurants, self-storage, medical and dental offices, gas stations, and agricultural buildings.

Rapid Reports rely on questionnaire data and standardized component allocations. Fully Engineered studies include actual cost record review, blueprint analysis, and site inspection. The IRS Cost Segregation Audit Techniques Guide identifies six methodologies, and the detailed engineering approach from actual cost records is the most defensible.

First-year deductions typically range from 20% to 35% of depreciable basis. On a $1M building basis, that translates to $200K-$350K in first-year deductions. At a 35% combined federal and state marginal rate, the first-year tax savings are roughly $70K-$120K. Use our savings calculator for an estimate specific to your property.