Ask an Expert: The Nitty Gritty Details of Cost Segregation Studies

What is a quality cost segregation study?

The IRS defines a quality cost segregation study as “a study that is both accurate and well-documented in the process of classifying, explaining the rationale, and substantiating the cost basis of each asset, while reconciling total allocated costs to total actual costs.”

Can a cost segregation study be preformed on buildings in the past?

Yes. Property owners can prepare a cost segregation look-back study on their current property and re-calculate the depreciation for the previous tax years based on their reclassified asset costs.

When is a cost segregation not a good option?

In order to take the full advantages of performing a cost segregation study on your property, it is recommended to own the property for at least two years or more. If your property is losing money it’s not recommended to perform a cost segregation study. Also, not all commercial properties will qualify for a study. Price valuation is an important factor on whether a study is necessary for the owner or not. Savings must be very significant compared to the costs acquired in performing the study.

If you have any further questions about cost segregation studies, check out our other FAQs here and here or send us your questions below.

Ask An Expert

Submit your question below and one of our experts will answer it for you.


Engineered Tax Services

Engineered Tax Services

Recent Posts

Establishing Your Accounting Firm On Social Media

Establishing your accounting firm’s voice on social media should be a top priority. If your firm doesn’t have a brand guide that includes its tone of voice, now is the perfect time to create one. It doesn’t have to be a full-blown brand guide⁠—just something that helps to establish and maintain a consistent brand voice.

Read More »
employee retention tax credit scams

How to avoid employee retention tax credit scams

A survey by the National Federation of Independent Business (NFIB) found that only 4% of small business owners are “very familiar” with the Employee Retention Tax Credit program. Furthermore, only 32% said they were “somewhat familiar” with the incentive. Scammers are taking advantage of this unfamiliarity to collect high fees from business owners. Unscrupulous companies

Read More »
accounting firms

Tips for Accounting Firms looking to get started on Social Media

Getting started on social media can be confusing and hard to understand. Especially for accounting firms that keep putting it off. Yet it truly is not as bad as it seems. Trust me. I manage over 20 social accounts, many of which I created from scratch. With the busy season behind us, now is the

Read More »

Contact Us