cost segregation services
cost segregation services
cost segregation services
“100% bonus depreciation is now permanent”

Unlock hidden tax savings
with cost segregation

The smartest way to decrease your taxable income.

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How it works

For every $1 million in building basis, a cost segregation study can generate $60,000–$100,000 in
additional first-year tax savings (37% bracket).

What is cost segregation?​

Cost Segregation is a tax strategy for real estate investors to decrease their taxable income and increase their deductions. A cost segregation study accelerates the depreciation of certain components of your real property, such as carpets, appliances, cabinetry, or landscaping. These assets can be written off completely in 5, 7, or 15 years, rather than 27.5 or 39 years.

Industries

Testimonials

Meet theTeam

Without a study

Standard straight-line

Entire building treated as one asset
Method
Single asset, fixed rate
One component, one schedule
IRS-assigned, no flexibility
Recovery period
27.5–39 yrs
Residential to commercial
No acceleration, same deduction every year
Annual deduction
Fixed
Same amount every year
Deductions spread evenly, no early benefit
Front-loaded savings
No
No flexibility or strategy
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Cost segregation study

Each component depreciated at its true useful life
Method
Itemized by component
Each element at its true useful life
Short-life assets like carpets qualify for 5 years
Recovery period
5–39 yrs
Short-life assets qualify for 5 yrs
Larger deductions in early years of ownership
Annual deduction
Accelerated
Larger deductions early on
Engineered for maximum first-year tax reduction
Front-loaded savings
Yes
Max first-year tax reduction
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For every $1 million in building basis, a cost segregation study can generate $60,000–$100,000 in additional first-year tax savings at the 37% bracket.

How a cost segregation study works

When you buy a commercial property, your purchase price is split between the land and the building. The land retains its value and can’t depreciate, but you can depreciate the building.

The IRS allows investors to claim depreciation on their building using an annual straight-line method. This is done by taking your purchase price minus the land value, and then dividing it by the number of years it takes to fully depreciate. For residential rental real estate, this is 27.5 years; for commercial real estate, 39 years.

A cost segregation expert can do a cost segregation study, which allows you to legally circumvent this straight-line method by itemizing and depreciating aspects of your building at different rates.

Industries that benefit from cost segregation

Short Term Vacation Rental
Drug stores
Mobile home parks
Golf courses
Banks
Self-storage
Industrial / warehouse
Office buildings
Medical & dental
Restaurants
Hotels & motels
Multifamily

100% bonus depreciation is now permanent

The 2025 One Big Beautiful Bill Act permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025. Components with a depreciable life of 20 years or less may now be written off entirely in year one, not just for a single tax year, but going forward.

Who can use a cost segregation study?

If you own an income-producing building, chances are you qualify.

You may qualify if, in the last 10 years, you’ve:

  • Purchased an existing commercial property
  • Constructed a brand-new building
  • Renovated, expanded, or restored
  • Paid for leasehold improvements
  • Completed or planned a 1031 exchange

Eligible property types:

  • Apartments / multifamily
  • Office & retail buildings
  • Medical / dental offices
  • Industrial warehouses
  • Mobile home parks, drug stores & more

How much will I save?

An example of year-one depreciation on a $1,000,000 property, with and without a study.

Without cost segregation

$5,000–$9,000

Year-one savings

With cost segregation

$60,000–$100,000

Year-one savings · 37% bracket

What our clients say

I was amazed that a Cost Segregation Study could get me so much additional depreciation and tax savings from owning commercial property. My accountant referred me to NCSS when my business came under IRS audit. We had a previous Cost Segregation Study done through another provider which began to crumble under pressure from the IRS auditor. I hired NCSS to perform a new engineer-based study to replace the old one. After speaking with NCSS, the auditor ‘acquiesced on all parts of the new Cost Segregation Study’! By hiring NCSS to perform a Cost Segregation Study, they were able to get me over $575,000 in additional depreciation above and beyond what the previous Cost Segregation Study had already taken! That resulted in significant tax savings!
Dr. Nathaniel Z.,MD
We have used other Cost Segregation firms in the past, but the quality of work we found with NCSS will have us call them again. Their workflow, from the time we engaged them to final delivery of the study, was seamless and professional in every way.
Jonathan T.,Principal
We were very excited to see our tax benefits from the completed Cost Segregation Study. We were pleased that your final numbers exceeded your projections; I was even more pleased at the benefits it would offer us. It was amazing that your firm was able to increase our depreciation deductions so dramatically to help us minimize our tax liability, all within the tax deadlines we were facing.
William L.,Chairman

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Frequently asked questions

Cost segregation is a tax strategy that allows real estate owners to accelerate depreciation on certain parts of a property. Instead of treating the entire building as one asset depreciated over 27.5 or 39 years, a cost segregation study separates the property into individual components, such as flooring, fixtures, appliances, landscaping, and certain building systems.
Many of those components may qualify for shorter depreciation schedules, which can result in larger deductions earlier in the ownership period. Real estate investors use cost segregation to reduce taxable income upfront, improve cash flow, and free up funds for reinvestment in the property or future acquisitions.
Cost segregation itself does not automatically increase audit risk when it is done correctly. The strategy has been recognized by the IRS for many years. The bigger issue is the study’s quality.
A properly prepared study should include clear documentation, engineering-based analysis, accurate asset classifications, and support for the depreciation schedules being used. Audit risk is more likely to come from vague reports, overly aggressive assumptions, or non-engineered studies that cannot be defended.
A defensible cost segregation study is built on more than a rough estimate. It should include a detailed review of the property, asset-level classifications, documented assumptions, and support tied to IRS guidance, tax law, and relevant case history.
The purpose of the study is to clearly show why certain components were reclassified into shorter depreciation categories. If the IRS or a CPA reviews the report, the methodology should be easy to understand and properly supported.
We focus on fully engineered, IRS-ready cost segregation studies. That means the study is designed for use by your CPA and supported by proper documentation.
We do not recommend relying on generic templates or basic desktop estimates when filing. Those may seem cheaper upfront, but they often lack the detail needed to confidently support the deductions being claimed.
A properly prepared cost segregation study should be designed for CPA use. That means the report should include clear depreciation schedules, asset classifications, and supporting documentation.
Many CPAs are comfortable using cost segregation studies when they are detailed, well-organized, and defensible. Coordination with your CPA can also make the filing process smoother and help ensure the deductions are applied correctly.
The cost of a cost segregation study depends on the property type, size, complexity, and scope of the analysis. A simple single-family rental may cost much less than a large multifamily, commercial, or mixed-use property.
The important thing is to compare the study fee against the estimated tax benefit. A good provider should be able to give you a clear fixed-fee quote upfront so you can evaluate the return before moving forward.
Yes, cost segregation can often offset rental income by increasing depreciation deductions from the property. If the rental activity produces taxable income, the accelerated depreciation from a cost segregation study may reduce or even eliminate some of that income for tax purposes. This can help improve after-tax cash flow for rental property owners. The exact benefit depends on your income, property type, passive activity rules, and overall tax situation. Your CPA can confirm how the cost segregation deductions apply to your rental income.
Yes, cost segregation can create a paper loss by increasing depreciation deductions in the early years of property ownership. A paper loss means the property may show a tax loss even if it is producing positive cash flow. This happens because depreciation is a non-cash deduction. You are not writing a check for depreciation, but it can still reduce taxable income. This is one reason real estate investors like cost segregation. The property can make money in real life, while the tax return tells a much more deduction-friendly story.
Yes, cost segregation can create a paper loss by increasing depreciation deductions in the early years of property ownership. A paper loss means the property may show a tax loss even if it is producing positive cash flow. This happens because depreciation is a non-cash deduction. You are not writing a check for depreciation, but it can still reduce taxable income. This is one reason real estate investors like cost segregation. The property can make money in real life, while the tax return tells a much more deduction-friendly story.
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