Cost Segregation Studies
Accelerate depreciation deductions and maximize the tax benefits of your real estate investments.
Cost segregation is one of the most powerful tax planning strategies available to commercial property owners. Through detailed engineering analysis, CPCON identifies building components that qualify for shorter depreciation recovery periods than the standard 39-year schedule for commercial property.
Our team of licensed engineers and tax professionals reclassify components such as electrical systems, plumbing, HVAC, site improvements, and decorative elements to 5, 7, or 15-year property classes. The result is significant tax deferral that improves cash flow and enhances investment returns. Combined with bonus depreciation provisions, the benefits can be substantial.
Unlock Hidden Tax Savings
For properties with construction costs exceeding $1 million, cost segregation typically generates sufficient benefits to justify the study cost many times over. Typically, 15-40% of building costs can be reclassified to shorter recovery periods.
Accelerated Depreciation
Reclassify building components to shorter recovery periods (5, 7, or 15 years vs. 39 years), generating immediate tax deductions.
Improved Cash Flow
Defer tax payments and reinvest savings into your business, acquisitions or other investments.
Catch‑Up Deductions
For existing properties, claim missed depreciation from prior years in a single tax year without amending returns.
Bonus Depreciation
Maximize benefits from current bonus depreciation rules allowing immediate expensing of qualified property.
A Proven Track Record
For over two decades, CPCON has developed and delivered cost segregation studies that withstand IRS scrutiny. Our reports include detailed documentation designed to satisfy IRS requirements and support your position if questions arise. Cost segregation is a well-established, IRS-accepted tax strategy.
Engineering Expertise & Tax Knowledge
Our team includes licensed engineers with construction and building systems expertise essential for accurate component identification, combined with deep understanding of tax code, regulations, and case law governing cost segregation and depreciation.
Industry Experience and Global Reach
With thousands of studies completed across all property types and construction methods, our professionals deliver on any type of cost segregation engagement – no matter how complex or challenging. Our work spans multiple continents and includes some of the largest and most complex engagements in the industry.
Integrated Team Approach
For every engagement, we take a sophisticated approach that includes the latest in engineering analysis, real‑world construction cost data, and a rigorous quality‑control process to ensure accuracy.
- Proprietary analysis based on engineering cost estimation methodologies and IRS Audit Techniques Guide for Cost Segregation.
- Studies prepared in accordance with the American Society of Cost Segregation Professionals (ASCSP) standards.
Potential Savings by Property Type
Office Buildings
15-25%Tenant improvements, specialized electrical, HVAC components
Retail Properties
20-35%Storefronts, decorative elements, site improvements
Industrial Facilities
25-40%Process equipment, specialized systems, heavy electrical
Healthcare Facilities
20-30%Medical equipment, specialized plumbing, backup systems
Hospitality Properties
25-35%FF&E, kitchen equipment, decorative finishes
Multi‑Family Residential
15-25%Appliances, carpeting, site amenities
* Percentages represent typical range of costs reclassified to shorter recovery periods. Actual results vary by property.
Our Study Process
A rigorous, engineering-based approach that produces defensible results and maximizes your tax benefits.
Preliminary Analysis
Review property information, construction costs, and tax situation to estimate potential benefits and confirm engagement scope.
Site Inspection
Detailed physical inspection to identify and document all building components, systems, and site improvements.
Cost Analysis
Engineering-based allocation of construction costs to individual components using actual costs or cost estimation techniques.
Asset Classification
Classification of each component into appropriate tax recovery periods based on IRS guidelines and case law.
Report Delivery
Comprehensive study report with detailed asset schedules, methodology documentation, and implementation guidance.
Tax Filing Support
Coordination with your tax advisors to implement findings and respond to any IRS inquiries.
Frequently Asked Questions
Related Insights
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Request a free preliminary analysis to estimate the benefits of cost segregation for your property.
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