Do you perform cost segregation studies?

No — we coordinate with a third-party cost segregation engineering firm and integrate their study into your books, depreciation schedule, and return. The engineering work is specialized enough that we leave it to firms that do nothing else, and focus on making sure it's applied correctly.

What's the difference between a 1031 exchange and cost segregation?

A 1031 exchange defers gain by rolling proceeds from a sold property into a new one; cost segregation accelerates depreciation on a property you already own or just acquired. They're often used together — a 1031 exchange into a new property, followed by a cost segregation study on it.

How much can bonus depreciation actually save me?

It depends on how much of the property's value cost segregation reclassifies into 5-, 7-, or 15-year components — often 20-35% of a building's basis. With 100% bonus depreciation currently in effect, all of that reclassified amount can be deducted in the first year.

Can I do a cost segregation study on a property I've owned for years?

Yes — a look-back study lets you capture the depreciation you missed in prior years through a catch-up adjustment on this year's return, without needing to amend anything.

Real Estate → 1031 & Cost Segregation

1031 exchange & cost segregation, handled right.

A cost segregation study reclassifies building components into 5, 7, and 15-year depreciation categories instead of 27.5 or 39 — and with 100% bonus depreciation restored, those deductions can hit in year one. We coordinate the engineering and exchange work, then make sure it lands correctly on your return.

Book a discovery call See the bonus depreciation rules

Investor and engineer reviewing building plans for a cost segregation study

Where this goes wrong

The problems specific to this process.

A cost seg study purchased, then never applied

The engineering firm delivers a detailed report reclassifying your building’s components — and it sits in a folder because nobody updated the depreciation schedule or amended the return to actually claim it.

1031 exchange deadlines missed by days

The 45-day identification window and 180-day exchange window are unforgiving and don’t pause for anything. Coordinating with your qualified intermediary on timing is as much a part of this as the tax treatment itself.

Bonus depreciation left on the table

With 100% bonus depreciation currently restored, cost segregation deductions can be claimed in full in year one instead of trickling out over decades — but only for CPAs who are actually tracking the current rules.

How we help

What that looks like in practice.

Cost segregation coordination

We bring in a third-party engineering firm for the study, review their findings, and integrate the reclassified components into your depreciation schedule correctly the first time.

1031 exchange tax reporting

Form 8824 and the underlying basis calculations prepared to match what your qualified intermediary executed — coordinated on timing so nothing is jeopardized.

Bonus depreciation planning

Current-year bonus depreciation rules applied to newly reclassified components, so accelerated deductions actually land in the year you need them.

Look-back studies for prior-year properties

Owned the property for a few years already? A look-back cost segregation study can still capture missed depreciation through a catch-up adjustment, without amending prior returns.

Key facts · bonus depreciation

100% bonus depreciation is permanently restored under current law — cost segregation deductions can hit fully in year one, not spread over decades.

A cost segregation study identifies which parts of a building qualify for 5-, 7-, or 15-year depreciation instead of the standard 27.5 or 39 years. Under current bonus depreciation rules, the entire reclassified amount can be deducted in the year the study is applied, rather than trickling out over the original schedule.

This reflects 2026 tax law as currently in effect — bonus depreciation percentages have changed by year before and are worth confirming at the time you file.

Last reviewed July 2026 · reflects current federal tax law

Real Estate