How much does a cost segregation study cost?

Study fees run from $1,200 to $12,000, set by the engineering scope of the property (type and size) rather than a percentage of your savings. You get a free estimate of your potential tax savings first, then a flat-fee quote before any work begins. Every study includes the detailed backup file and lifetime IRS audit defense, with no hidden or percentage-based fees.

What types of properties qualify for cost segregation?

Residential rental properties (single-family homes, short-term rentals, duplexes, and apartment buildings) and commercial buildings (office, retail, restaurants, self-storage, warehouses, medical buildings, and hotels) purchased, constructed, or renovated after 1986 can qualify. With work-based flat fees starting at $1,200, properties with a depreciable basis of $300,000 or more frequently see strong first-year tax savings.

How much can I save with a cost segregation study?

Cost segregation typically reclassifies 20% to 40% of a building's depreciable basis into 5-, 7-, and 15-year recovery periods, shifting deductions from 27.5 or 39 years into the early years of ownership. For example, on a $1,000,000 depreciable building basis with 30% ($300,000) reclassified into short-life assets eligible for 100% bonus depreciation (for qualified property acquired and placed in service after January 19, 2025), a taxpayer in a 37% marginal federal tax bracket can realize $111,000 in first-year federal tax savings from the accelerated portion.

When is the best time to conduct a cost segregation study?

The ideal time is the year you place a property in service, as this maximizes your first-year tax benefits. However, cost segregation can be performed on properties placed in service as far back as 1987 through a 'look-back study' with Form 3115, though this may involve additional complexity.

What assets are typically reclassified in a cost segregation study?

Common assets reclassified include electrical installations, plumbing, finishes, carpeting, specialized HVAC systems, landscaping, site improvements, decorative elements, and more. Our engineers identify components that can legally be separated from the building structure and depreciated over shorter lives.

How does the cost segregation process work?

Our process includes an initial assessment, property inspection by qualified engineers, detailed analysis of construction documents and costs, identification of assets for reclassification, preparation of a comprehensive report with all findings and calculations, and implementation assistance with your tax professional.

Is a cost segregation study worth the investment?

For most rental and commercial properties with a depreciable basis of $300,000 or more, accelerating 20-40% of the building basis into 5-, 7-, and 15-year recovery periods creates significant present value tax savings. Because we provide a free benefit estimate and an exact flat-fee quote ($1,200 to $12,000) before any work begins, you and your CPA can verify the projected return upfront.

Engineer-built cost segregation studies for rental & commercial property owners

Q: What is cost segregation?

Cost segregation is a tax planning strategy that identifies and reclassifies personal property assets in commercial buildings from real property to personal property. This allows for shorter depreciation recovery periods of 5, 7, or 15 years, rather than the standard 27.5 or 39 years for real property.

Reclassify 20% to 40% of your building’s depreciable basis into 5-, 7-, and 15-year recovery periods instead of waiting 27.5 or 39 years, and front-load eligible short-life deductions into year one when bonus depreciation applies. Every study is prepared and signed by a cost segregation engineer (ASCSP Member M009-25), documented to the IRS Audit Techniques Guide, and priced at a transparent flat fee.

Talk to a cost seg engineer See a real 64-page engineer study

Instant online savings estimate in 60 seconds. You get an estimated benefit range and a transparent flat-fee quote before any work begins.

IRS Compliant

Founded by CPAs

1,000+ Studies

$1B+ Analyzed

Lifetime Audit Defense

Ongoing Asset Tracking

Matthew Gigantelli

Lead Cost Segregation Engineer

ASCSP Member M009-25

“A study is only worth what it survives. We document every reclassification to the IRS Audit Techniques Guide, so the deduction still stands years later.”

Studies completed: 1,000+
Property value analyzed: $1B+

Member, American Society of Cost Segregation Professionals, the body that sets technical standards for the industry.

What is Cost Segregation

How You Save with Cost Segregation

Turn 27.5-39 year depreciation into 5-15 year write-offs, and with 100% bonus depreciation on property acquired and placed in service after January 19, 2025, capture those deductions in year one.

IRS allows accelerated depreciation on qualifying building components from standard periods (27.5 years for residential, 39 years for commercial) down to 5, 7, or 15 years. Get immediate tax deductions and improved cash flow without changing your total depreciation amount.

Example Savings

Standard Approach

$1,000,000 Commercial Property

• Depreciated over 39 years
• Annual deduction: ~$25,640
• Year-one tax savings: ~$8,970 (35% rate)

Recommended

With Cost Segregation

Same $1,000,000 Property

• ~30% reclassified to 5, 7 & 15-year property
• Year-one deduction: ~$150,000
• Year-one tax savings: $52,500
• Net benefit: $43,530 more cash in year one

Actual results vary by property, structure, and tax situation.

IRC § 168(k) Statutory Briefing

Bonus Depreciation: The Rate Turns on Your Acquisition Date

One Big Beautiful Bill (OBBB) — Enacted July 4, 2025

Section 70301

Qualified property acquired and placed in service after January 19, 2025 qualifies for 100% bonus depreciation, permanently. Property acquired before January 20, 2025 and placed in service in 2025 is limited to 40%.

In the 100% branch you can deduct the full cost of qualified short-life assets in year one when combined with an engineer-prepared cost segregation study.

How It Works

Cost segregation identifies building components that can be depreciated faster (5–15 years instead of 27.5–39 years). With 100% bonus depreciation, which applies to qualified property acquired and placed in service after January 19, 2025, you deduct 100% of those reclassified assets immediately instead of spreading them over decades.

Example: $1M Commercial Property

Method	Year 1 Deduction	Tax Savings*
Standard	$25,640	$8,974
Cost Seg Only	$109,700	$38,395
Cost Seg + 100% Bonus	$334,125	$116,944

*Assumes 35% combined tax rate

Current Statutory Rates

Property Acquired AND Placed in Service AFTER Jan 19, 2025

100%

Permanent Statutory Rate (OBBB)

IRC § 168(k)

Property Acquired BEFORE Jan 20, 2025

Placed in service in 2023	80%
Placed in service in 2024	60%
Placed in service in 2025	40%
Long production period property & certain aircraft (2025)	60% by election

Property is not treated as acquired after a date if a written binding contract for the acquisition was entered into on or before it.

What Changed, and What Now Decides Your Rate

The rate no longer erodes annually. Section 70301 of the OBBB struck the termination clause and the phase-down paragraphs of IRC 168(k), so there is no scheduled step-down to race. What decides your rate is which branch the property falls in, and that is settled by the acquisition date, not by how soon you order a study. OBBB also added qualified production property, which covers certain manufacturing buildings.

Note: Consult with your tax professional for your specific situation. Statutory rates and binding-contract rules are governed by IRC § 168(k).

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45 Property-Type Planning Bands

Typical Short-Life Reclassification by Property Type

Share of depreciable building basis typically reclassified into 5-year personal property and 15-year land improvements across our published engineering planning bands.

Explore all 45 property bands →

Standalone Single-Family

24% to 34%

5-Year: 16% to 22% | 15-Year: 8% to 12%

Appliances, flooring, cabinetry, millwork, driveways, fencing, and exterior site improvements.

Small & Medium Multifamily (2 to 20 Units)

22% to 34%

5-Year: 16% to 24% | 15-Year: 6% to 10%

Unit flooring, cabinetry, appliances, dedicated electrical/plumbing, parking lots, and landscaping.

Full-Service & Quick-Service Restaurants

28% to 44%

5-Year: 20% to 32% | 15-Year: 8% to 12%

Commercial kitchen hood and grease systems, walk-in coolers, specialized lighting, signage, and site paving.

Low-Rise & Medical Office

20% to 34%

5-Year: 12% to 22% | 15-Year: 8% to 12%

Tenant build-outs, demountable partitions, data cabling, medical gas/plumbing, and exterior site work.

Full-Service Hotels & Resorts

26% to 40%

5-Year: 16% to 24% | 15-Year: 10% to 16%

FF&E packages, guestroom finishes, hospitality laundry/kitchen systems, pools, and site lighting.

Warehouses & Self-Storage

15% to 42%

Warehouse: 15% to 28% | Mixed Storage: 26% to 42%

Heavy power distribution, loading docks, security fencing, drive aisles, and climate-control systems.

Bought in a Prior Tax Year?

Look-Back Studies & IRS Form 3115 Catch-Up

You do not have to run a study in the exact year you bought the building. For properties placed in service in prior tax years, a look-back engineering study where Form 3115 may be appropriate lets you claim missed catch-up depreciation on your current tax return without amending prior returns.

IRC § 481(a) catch-up schedule included Check prior-year property →

Verify Our Work Before You Order

Inspect a Real 64-Page Engineer-Signed Study

Most providers hide their deliverable behind a sales call. Review our complete 64-page engineering report online, including CSI MasterFormat cost allocations, component methodology, legal citations, and Matthew Gigantelli’s engineer sign-off.

Ungated 64-page PDF & interactive viewer View 64-page sample report →

Peace of Mind

Learn More About Audit Protection

Every study includes comprehensive audit support, so you can file with confidence knowing we stand behind our work.

Engineer-Grade Reports

Every study includes detailed engineering analysis built around IRS Cost Segregation Audit Technique Guide documentation expectations

Legal Citations Included

We reference specific IRS guidelines, audit guides, and relevant court cases

Lifetime Coverage

Audit support lasts for the life of the study, not just the first year

What's Included

Our audit protection means you're never alone if the IRS has questions about your cost segregation study.

Full Documentation Support

We defend all asset classifications and basis allocations with detailed engineering analysis, IRS citations, and court case references.

Direct IRS Response Support

If the IRS questions any element of the study, simply forward us their inquiries. We'll prepare detailed responses and provide clarity for you to submit with your CPA.

Expert Representation

Should an audit proceed to advanced stages, we represent our firm's methodology and defend our classification process, providing additional clarity and IRS-compliant documentation.

How Audit Support Works

Receive IRS Inquiry

If the IRS questions your cost segregation deductions, forward their inquiry to us immediately.

We Prepare Your Response

Our team analyzes each question and prepares comprehensive, IRS-compliant responses with supporting documentation.

Submit with Your CPA

You and your CPA review our responses and submit them to the IRS auditor with confidence.

Ongoing Support

We remain available throughout the audit process to defend our methodology and classifications.

Important: Our liability is limited to the study fee. Audit protection covers our professional support and defense of our work product, classifications, and methodology. Tax outcomes remain subject to IRS review and your individual tax situation.

Testimonials

What Our Clients Say

We're trusted by individual property owners, short-term rental hosts, multifamily operators, investment firms, and syndicators across the country.

Client feedback from completed studies, shared with permission. First names only, with property and location details generalized to protect client privacy.

Why Property Owners & CPAs Choose Us

Engineered for Maximum Deductions & IRS Defense

As an AI-assisted engineering study firm, we combine engineer-led cost segregation analysis with technology-driven efficiencies to deliver full IRS-defensible studies at transparent flat fees.

Technology-Driven Efficiencies

As an AI-assisted engineering study firm, we use modern technology to automate data gathering, cost indexing, and component research, delivering full engineer-signed studies at a fraction of traditional firm fees.

Engineer-Led & ASCSP Member

Every study is overseen and signed by Matthew Gigantelli (ASCSP Member M009-25) using RS Means construction cost reconstruction, site verification, and the 13 principal elements of the IRS Audit Techniques Guide.

Work-Based Flat-Fee Pricing

Study fees range from $1,200 to $12,000 based on the engineering work required for your building type and size, never a percentage of your tax savings and never a software-only estimate.

CPA-Ready Fixed Asset Schedules

You receive a 60+ page engineering report PDF plus Excel/CSV fixed asset schedules with CSI MasterFormat allocations and MACRS recovery periods ready for immediate import into your CPA’s tax software.

Look-Back & Form 3115 Support

Purchased or renovated in a prior tax year? We build retroactive depreciation schedules and IRC § 481(a) calculations where Form 3115 may be appropriate so you can claim catch-up deductions without amending prior returns.

Partial Asset Disposition Tracking

We break out roofs, HVAC units, windows, and interior finishes individually so when you renovate in future years, your CPA can write off the retired component’s remaining basis immediately.

Beyond the Report

Maximize Tax Savings Today & Tomorrow

Get immediate tax deductions with cost segregation, plus ongoing benefits when you renovate or replace building components.

Future Tax Savings from Renovations

We track all your assets in our secure portal. When you replace HVAC, flooring, or other components, you can write off the old asset's remaining value, creating additional tax deductions beyond your initial study.

Integrated CPA Services

Work directly with your existing CPA or leverage our certified tax professionals. We ensure seamless integration with your accounting workflow and provide ongoing tax strategy consulting.

Renovation Tax Strategy

Planning a renovation? Our report helps you maximize deductions by identifying which old components can be written off when replaced, a strategy that can save thousands more in future years.

PAD

PARTIAL ASSET DISPOSITION REPORT

Generated: Nov 15, 2024

Property: Building A

ID: #8821-B

Renovation Impact Analysis

Partial Asset Disposition Calculation

Asset Description	Value	Status
Roof Replacement (New) Placed in Service: Nov 2024	$45,000	Capitalized
Roof (Original) Disposed: Nov 2024	$12,500	Write-off
HVAC Units Remaining Useful Life: 5 yrs	$28,000	Depreciating
Total Tax Deduction	$12,500 (Immediate)

New Asset

Disposition

FreeCostSeg.com • Professional Tax Engineering

Cost Segregation & Ongoing Tax Benefits

Get immediate tax savings through accelerated depreciation, then use our asset tracking to maximize deductions on future renovations and replacements.

Cost Segregation

Renovation Tax Benefits

Asset Tracking

Tax Advisory

How It Works & Pricing

From Address to Audit-Ready Study in 3 Steps

A streamlined engineering workflow designed for rental and commercial property owners, with transparent, work-based flat-fee pricing upfront.

01 60 Seconds Online

Free Benefit Estimate & Flat-Fee Quote

Enter your property address in our interactive calculator or submit your property details below. You see your estimated 5-, 7-, and 15-year reclassification range and exact study fee before any work begins.

Run instant calculator →

02 15 to 20 Min Walkthrough

Document Review & Virtual Site Inspection

Upload your closing statement or construction cost records and complete a guided virtual site walkthrough. Our engineers verify every building system and land allocation without weeks of scheduling delays.

Closing statement + guided photo/video verification

03 1 to 2 Weeks Delivery

Engineer-Signed Study & CPA Schedule

Receive your 60+ page IRS Audit Techniques Guide engineering report signed by Matthew Gigantelli (ASCSP M009-25), plus Excel/CSV fixed asset schedules ready for your CPA and backed by lifetime audit defense.

Preview 64-page deliverable →

Transparent Flat-Fee Pricing

Priced by Engineering Scope, Never a Percentage of Your Savings

Every fee band includes a full engineer-signed study, CSI MasterFormat cost schedules, CPA-ready Excel/CSV files, and lifetime IRS audit defense.

See full pricing breakdown →

Residential & Small Property

$1,200 - $2,500

Single-family rentals, condos, short-term rentals (Airbnb / VRBO), and 2 to 4 unit residential properties.

Traditional firms typically quote $3,000 to $9,000

Most Commercial

Standard Commercial

$2,500 - $6,000

Office buildings, retail strip centers, restaurants, self-storage, warehouses, and 5 to 20 unit multifamily buildings.

Traditional firms typically quote $5,000 to $25,000

Large & Complex Assets

$6,000 - $12,000

Hotels and hospitality, 21+ unit apartment complexes, large industrial facilities, and $10M+ commercial properties.

Traditional firms typically quote $12,000 to $60,000

About Us

Built by Engineers, CPAs & Former IRS Examiners

We combine civil and construction cost engineering with technology-driven efficiencies to deliver institutional-grade depreciation studies for rental and commercial property owners.

Private Equity & CPA Leadership

Founded by CPAs and real estate private equity professionals whose team has collectively analyzed over $1B in real estate in previous roles, building the exact engineering-grade cost segregation firm we wished existed for our own portfolios.

Engineering & Cost Reconstruction

Our team combines civil and construction engineering, RS Means cost estimating, and IRS examination perspective with AI-assisted engineering workflows so every component is defensibly supported.

IRS Examiner Perspective

Our educational content includes IRS examiner perspective from James C. Peacock, a technical contributor and former IRS General Engineer with 38.5 years at the IRS. James co-contributed to the Cost Segregation Audit Technique Guide and served as the IRS's primary technical expert on Section 179D from 2014 through 2025.

JPeacockCSA.com

Investor Backed

Backed by Schneider Ventures Accelerator, which funds innovative real estate technology businesses, and supported by top national real estate investors who have been using cost segregation for years.

IRS examiner perspective

James C. Peacock, Former IRS General Engineer

James spent 38.5 years at the IRS, co-contributed to the Cost Segregation Audit Technique Guide, and served as the IRS's primary technical expert on Section 179D from 2014 through 2025. His educational contributions help property owners understand what examiners look for: land support, RS Means detail, site evidence, and documentation that survives an IDR.

Read the IRS engineer guide | JPeacockCSA.com

Modern CFO's Mission

"Making cost segregation accessible to all property owners, not just the wealthy."

Our Team's Experience

Our team brings extensive experience from their previous roles

$1B+

Real estate analyzed in previous roles

1,000+

Properties our experts have collectively analyzed

100%

Success rate our tax specialists have maintained defending IRS audits

Meet Our Lead Engineer

Led by Industry Veteran Matthew Gigantelli

Lead Expert

Matthew Gigantelli

Lead Cost Seg Engineer

5+ Years Experience

1000s of Studies

ASCSP M009-25

Member of American Society of Cost Segregation Professionals (ASCSP)

Proven Track Record

With over 5 years of specialized experience in cost segregation engineering, Matthew has successfully completed hundreds of studies across multiple organizations, helping property owners maximize their tax savings.

Leadership Experience

Most recently serving as Head of Product for Cost Segregation, Matthew brings deep product expertise and strategic oversight to ensure our analyses exceed industry standards and deliver maximum value to clients.

Member of ASCSP

Matthew is a proud member of the American Society of Cost Segregation Professionals (ASCSP), holding membership number M009-25. Established in 2006, ASCSP is the leading non-profit organization dedicated to education, technical standards, and ethical practices in the cost segregation industry, ensuring Matthew adheres to the highest professional standards.

Expert-Led Analysis with Proven Results

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FAQ

Frequently Asked Questions

Learn more about our cost segregation service and how we can help you save on taxes.

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Pick a time on our engineering calendar now, or send your property address and contact details so our engineers can prepare your benefit analysis and flat-fee quote before reaching out.

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