Cost Segregation Services in San Francisco, California

The San Francisco real estate market is experiencing a historic rebound. With median one-bedroom rents surging 13% and commercial office sales eclipsing $1.2 billion for the first time since 2021, the need for strategic tax planning has never been higher.

At Engineered Tax Services, we help San Francisco investors and property owners leverage a San Francisco cost segregation study to maximize cash flow. By accelerating depreciation on offices, luxury multifamily developments, and high-tech manufacturing centers, Engineered Tax Services ensures you keep more of your capital to reinvest in the Bay Area’s growth.

Cost seg works by allowing real estate investors in San Francisco to more quickly deduct the depreciation of a property against their taxable income, which is beneficial across various types of investment properties, from single-family homes to larger commercial buildings​​. 

A cost segregation service in San Francisco specifically dissects the construction cost or purchase price of the property into components that can be depreciated over shorter periods, like five, seven or 15 years, instead of the standard 27.5 or 39 years. This approach aims to identify all property-related costs that are eligible for accelerated depreciation, thus offering a more favorable tax treatment​.

The San Francisco Advantage: Why Now?

San Francisco property owners face some of the highest state income tax rates in the country. However, recent federal updates have turned the tide for investors:

• The 100% Bonus Depreciation Reinstatement: Under the OBBBA signed in July 2025, any qualifying property placed in service after January 19, 2025, is eligible for 100% bonus depreciation. This reverses the previous phase-down and allows for full expensing of 5, 7, and 15-year assets in year one.

• AI & Tech Infrastructure: New office build-outs for AI companies in the Financial District and Mission Bay contain high percentages of specialized electrical and tech-ready infrastructure that qualify for 5-year depreciation.

• Office-to-Residential Conversions: With San Francisco's push for downtown conversions, a cost segregation study can identify massive write-offs for structural components that are removed or replaced during renovation.

Specialized Expertise for the Bay Area

San Francisco's “Trophy” buildings and high-density residential units require more than a simple accounting audit. Engineered Tax Services provides:

1. Engineering-Based Analysis: We don't just look at invoices. Our engineers conduct site visits to San Francisco properties to document “hidden” assets like dedicated data-center cooling and reinforced power systems common in tech-heavy buildings.

2. California State Tax Alignment: While federal law allows 100% bonus depreciation, California often requires different treatment. Engineered Tax Services provides the dual reporting your CPA needs to stay compliant with both IRS and California Franchise Tax Board (FTB) rules.

3. Audit-Ready Documentation: Every San Francisco report we produce follows the strict IRS Audit Technique Guide, ensuring your deductions are defensible.