Frequently Asked Questions

By default, real‑estate depreciation offsets passive rental income (IRC §469). If you materially participate and qualify as a Real Estate Professional, you may apply the losses against non‑passive income. See IRS Publication 925 for full rules.

Depreciation taken on 5‑ and 15‑year assets is subject to ordinary‑income recapture under IRC §1245. However, the time‑value benefit earned during ownership often outweighs the future tax. Your CPA can model the sale scenario.

Our studies strictly follow IRS guidelines and engineering-based methodologies outlined in the IRS Cost Segregation Audit Techniques Guide. While the chance of an audit is low, if it does happen, we'll drop everything we're doing to defend our work and assist your tax professional.

Once all required documents are provided and we can complete a site visit, most studies are finished within about one week.

Typical documents include your property's closing statement, appraisal (if available), site plan, floor plan, construction or renovation cost breakdowns, and recent tax records. The more detail we have, the faster and more precise your study will be.

No. Cost segregation affects your federal and state income taxes, not your local property tax assessment. Your assessed value for property tax purposes will remain the same.

Yes. You can perform a "look-back" study on properties placed in service in prior years and catch up on missed depreciation through a one-time adjustment (Form 3115) without amending past tax returns.

While results vary, residential rental properties often see 15–30% of their value reclassified into shorter-lived asset categories, generating first-year tax savings that can range from $10,000 to $50,000+ depending on your property value and tax bracket.

Absolutely. Cost segregation is a tax strategy explicitly recognized by the IRS. When done using proper engineering-based analysis — the way we do it — it's completely legal and widely used by real estate investors.

Yes. We work directly with your CPA or tax professional to ensure the results are integrated seamlessly into your tax filings. If they have questions about our methodology, we'll provide clear documentation and explanations.

Yes. A site visit allows us to document materials, measurements, and building components accurately — ensuring the study can stand up to IRS scrutiny.