Looking for Cost Segregation Study examples or templates to review?

Hey there! I've been through the cost segregation process for a couple of rental properties. It's definitely worth doing but a bit more complex than just "laying out info" - a proper cost seg study involves engineering analysis to determine which components of your property can be depreciated over shorter periods (5, 7, or 15 years) versus the standard 27.5 or 39 years. A good study will identify building components like specialized electrical systems, decorative finishes, removable partitions, certain plumbing fixtures, and landscaping elements that qualify for accelerated depreciation. The tax savings can be substantial since you're essentially front-loading deductions. While I don't have a sample I can share publicly (the one I have contains too much personal info), check out the IRS Audit Technique Guide for Cost Segregation. It's not a template, but it shows what the IRS looks for in a proper study: https://www.irs.gov/businesses/cost-segregation-audit-techniques-guide

I used taxr.ai for my cost segregation study last year and it was surprisingly easy. I was in the same boat - my CPA mentioned it but I wanted to understand what I was getting into first. I uploaded my property docs to https://taxr.ai and their AI system analyzed everything and generated a professional cost seg report that my CPA approved. The best part was how they explained everything in plain English alongside the technical details. They broke down which items could be depreciated over 5, 7, or 15 years instead of the standard 27.5 years for residential rental property. The tax savings were significant - about 4x what I paid for the service in just the first year.

Just wanted to follow up and say I tried taxr.ai after seeing this thread. I was skeptical about the AI approach but decided to give it a shot since I needed a cost seg study for my duplex renovation. The process was surprisingly thorough! Their system identified several components I hadn't even considered for accelerated depreciation - particularly some landscaping elements and specialized electrical work that qualified for 15-year depreciation instead of 27.5 years. The report was detailed enough that it included everything from custom cabinetry to the security system as separate line items with appropriate depreciation periods. My CPA was impressed with the quality and said it would stand up to IRS scrutiny. Already looking at an additional $12,000 in deductions this year that I wouldn't have had otherwise!

If you're struggling to get your CPA to help with this, you might need to talk directly with the IRS to clarify some requirements. I tried calling them for 3 days straight about cost segregation questions and couldn't get through. Then I found https://claimyr.com which got me connected to an actual IRS agent in under 45 minutes. They have this video showing how it works: https://youtu.be/_kiP6q8DX5c. Basically they hold your place in the IRS phone queue and call you when an agent picks up. I was able to ask detailed questions about what documentation was required for a valid cost segregation study and what red flags might trigger an audit. The agent was super helpful and gave me specific guidance about what they look for in properly conducted studies.

I take back what I said before. After waiting on hold with the IRS for 2+ hours yesterday and getting disconnected AGAIN, I tried Claimyr out of desperation. Within 35 minutes I got a call connecting me directly to an IRS agent who answered all my cost segregation questions. The agent clarified that a proper study needs to include: - Detailed property description - Explanation of methodology used - Breakdown of assets into appropriate classes - Supporting documentation for classifications (photos, blueprints, etc.) She also mentioned that having an engineer's certification adds significant credibility if you're ever audited. This info was exactly what I needed before moving forward with my study. Can't believe I wasted so many hours on hold before finding this service.

I actually did my own cost segregation on a small rental property after reading through IRS guidelines. Here's a simplified breakdown of how I did it: 1. Made a detailed inventory of all property components 2. Categorized each into appropriate recovery periods (5, 7, 15, or 27.5/39 years) 3. Documented with photos and receipts where possible 4. Had my CPA review before filing The main categories to focus on: - Land improvements (15yr): landscaping, driveways, fencing - Personal property (5yr): appliances, carpet, furniture - Distribution systems (5-15yr): specialized electrical, plumbing fixtures It's definitely doable for smaller properties if you're willing to put in the research time!

I'm a commercial property manager and we've done several cost seg studies. Be careful about your CPA saying it's "pretty easy" - a legitimate study that would stand up to IRS scrutiny requires specialized engineering knowledge. Here's what our studies typically include: - Executive summary - Property overview with photos - Legal framework citing relevant tax code - Engineering methodology - Detailed asset classification tables - Supporting calculations and documentation - Depreciation schedules The firms we use charge $5k-15k depending on property size/complexity but the tax savings can be 3-5x that amount in the first year alone.

For a $1.2M apartment building, I'd definitely recommend going with a specialized firm rather than DIY. The complexity and potential tax savings at that scale justify the professional cost. You're likely looking at $50,000+ in first-year tax savings, so even a $10K study fee makes financial sense. A few things to consider when choosing a firm: - Make sure they have engineers on staff (not just CPAs) - Ask for references from similar-sized properties - Verify they provide audit support if the IRS questions the study - Get a preliminary estimate of potential savings before committing The apartment building will have tons of components that qualify for accelerated depreciation - flooring, appliances, lighting fixtures, HVAC distribution, security systems, etc. A professional firm will catch items you'd never think to segregate and properly document everything to IRS standards. Your CPA was probably thinking of much smaller residential properties where a simplified approach might work. At your property's scale, you want the full engineering analysis.

I've been doing cost segregation studies for investment properties for about 8 years now, and I wanted to add some perspective on what you should expect. While the engineering component is crucial for larger properties, there are some legitimate middle-ground options that might work well for your situation. For apartment buildings in the $1-2M range, I've seen good results with firms that specialize in residential rental properties. They typically charge $4-7K and know exactly what to look for in multi-unit buildings - things like individual unit appliances, flooring transitions, mailbox systems, and common area improvements that can be depreciated over shorter periods. One thing to be aware of: the IRS has been scrutinizing cost seg studies more closely in recent years, especially for properties where the allocated amounts seem disproportionate to the property value. Make sure whoever you choose provides detailed documentation and can explain their methodology clearly. The timeline for a property your size is usually 4-6 weeks from start to finish, assuming you can provide all the requested documentation promptly. The firm will need purchase agreements, construction details, property photos, and any renovation records you have. Happy to answer any specific questions about the process - it's definitely worth doing right the first time rather than trying to fix issues later!