Lower Your Taxes and Increase Cash Flow
Cost Segregation is a powerful tool for real estate owners to save money on taxes. It increases your cash flow by reducing your taxable income.
Saved on Taxes
Properties
Kyle C.
Country Club
Kris E.
Short Term Rental Home
John A.
Retail Facility
How Does Cost Segregation Work?
Identify and Reclassify
We help real estate owners identify faster-depreciating assets and reclassify them into their IRS-approved categories.
Minimize Taxes
Cost segregation reduces your taxable income. You pay less tax and hold on to your money for your next investment.
Increase Profitability
Cost segregation can help you maximize the value of your real estate investments and increase profitability.
Wondering if your property is a fit for cost segregation?
We work on a variety of asset classes:
Short Term Rental
Warehouse Facilities
Self Storage Facilities
Hotels & Motels
Apartment Complexes
Restaurants
Shopping Centers
Nursing Homes
Gas Stations
Ranch & Agricultural
Office Buildings
Industrial Manufacturing
Turn a cost segregation study into real-world tax savings. FAST.
We tour your property quickly and easily using the technology that already exists on your cell phone. Less travel means less overhead that we are able to pass on as savings to our customers.
Quality Matters. We use the highest standards and provide audit support for our work.
Our studies are performed by a team of experienced engineering experts, using the Replacement Cost New Less Depreciation methodology. We stand by our conclusions and we are experienced in assisting clients before the IRS. Audit support is provided at no additional charge to our clients.
We work with your accountant to make their job easier and save you more money.
Our goal is to help our clients defer taxes. We will work with you and your CPA to ensure a cost segregation study is a good fit. We want the cost seg process to be painless and after completing the study we share an excel copy of the fixed asset schedule to make your accountant's job easier too.
Our simple 4 step process to save you more time & money
Request Your Free Proposal
Provide us with your basic property details. This information will form the backbone of your custom proposal that will include your estimated tax savings. We will reach out to you if we require additional information.
Confirm Property Details
Once you sign we collect any supporting documentation. No appraisal? No problem. Let our team know and we will work to evaluate your property with only the documents you already have.
Schedule Virtual Site Visit
If you choose our Fully Engineered service, we will collect additional details, schedule your site visit, and give you all the info you need to prep. For Rapid Reports, no site visit is necessary.
Unlock Tax Savings
Our expert engineers evaluate your property details and create your custom report. Once completed we provide a final pdf report as well as the fixed asset schedule to share with your accountant.
We've performed thousands of cost seg studies in all 50 states
From remote cabins in Colorado to shopping centers in New York City - we have been there, done that. Our team is ready to tackle your project - big or small.
Ready to Save on Taxes
Unlock Your Tax Savings
Request Your Free Proposal
Get Your Free Cost Segregation Proposal
Our team of experts will work with you to identify potential savings and make the process easy and hassle-free.
Ready to Save on Taxes
Unlock Your Tax Savings
Request Your Free Proposal
Get Your Free Cost Segregation Proposal
Our team of experts will work with you to identify potential savings and make the process easy and hassle-free.
Frequently Asked Questions
As a high W-2 earner, your ability to use rental property losses from cost segregation to offset wages depends on specific IRS rules regarding passive activities. Generally, rental activities are considered passive, and passive losses cannot offset active income like W-2 wages unless you qualify for specific exceptions.
The most comprehensive exception is achieving Real Estate Professional status, which requires spending more than 750 hours annually and more than half your total working time in real estate activities, plus materially participating in your rental properties. This is often difficult for high W-2 earners with full-time jobs to achieve. However, a more accessible option for many is the short-term rental exception (also known as the short-term rental loophole).
If your property has an average guest stay of 7 days or less, it's not considered a passive rental under IRS rules. By materially participating in the property's operation, which can be achieved through various tests including working 100-plus hours annually with no one else participating more, you can treat the income and losses as active, allowing offset against your W-2 income. The $25,000 active participation exception for long-term rentals phases out completely at $150,000 of modified adjusted gross income, making it unavailable to most high earners.
Even if you can't immediately use the losses against W-2 income, cost segregation still provides value by creating suspended passive losses that offset future passive income, reduce taxable rental income in profitable years, and become fully deductible when you sell the property. We strongly recommend consulting with a qualified tax advisor to determine your specific eligibility and develop the optimal strategy for your situation.
Yes, you can absolutely perform a cost segregation study in 2025 for a property placed in service in 2024. The cost segregation study is a valuable tool that provides your CPA with the necessary documentation to optimize property depreciation, and it's a one-time analysis that remains valid indefinitely. There's no requirement that the study be completed in the same calendar year as the property acquisition or placement in service. As long as the study is completed before you file your tax return for the year you want to claim the benefits, you can apply the accelerated depreciation.
The report will analyze the property as of its placed-in-service date in 2024 and provide depreciation schedules starting from that date. Your CPA will use this information when preparing your 2024 return, regardless of when in 2025 the study is actually completed, provided all deadlines are met.
The One Big Beautiful Bill Act, signed into law on January 19, 2025, has reinstated permanent 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025, fundamentally changing the landscape for real estate investors. For properties placed in service before January 19, 2025, unfortunately, the prior phase-down schedule remains in effect, meaning these properties receive 60% bonus depreciation if placed in service in 2024, or 40% if placed in service between January 1 and January 19, 2025.
The new 100% rate cannot be applied retroactively to these properties due to the specific effective date provisions in the legislation. However, for properties placed in service after January 19, 2025, the reinstated permanent 100% bonus depreciation applies to all qualified property identified in your cost segregation study, including 5-, 7-, and 15-year property classifications. This permanence eliminates concerns about future phase-downs and makes long-term tax planning more predictable.
R.E. Cost Seg is committed to ensuring all our clients receive maximum value from this law change. All new studies for properties placed in service after January 19, 2025, automatically apply the 100% rate. For studies we completed earlier in 2025 before the law was signed, we provide complimentary updates to the depreciation schedules if your property qualifies for the higher rate. Simply contact our team to request your free updated schedules.
This permanent reinstatement makes cost segregation studies even more valuable, as you can now accelerate the full cost of short-life property into the year placed in service without worrying about diminishing benefits in future years.