Cost Segregation Services
We help property owners reduce their tax liability through detailed cost segregation studies. Our team identifies assets that qualify for shorter depreciation periods under IRS rules.
Maximize Your Tax Benefits with Cost Segregation
Cost segregation is a tax strategy that allows faster depreciation of certain parts of a building. This includes items like flooring, lighting, electrical systems, and finishes. Instead of spreading depreciation over 27.5 or 39 years, we reclassify these items into 5, 7, or 15-year categories.
Our team performs engineering-based studies to find and separate these components. This process helps reduce taxable income and increases cash flow. We prepare full reports that meet IRS standards and support you during tax filing or audits.
We serve commercial property owners, real estate investors, developers, and CPAs. If you own or recently bought, built, or renovated a property, a cost segregation study can benefit you.
How Cost Segregation Works?
Cost segregation breaks down the total cost of a building into separate parts. These parts include personal property, land improvements, and building structure. Each part has a different depreciation period under IRS rules.
Personal property includes items like carpets, cabinets, lighting, and appliances. These qualify for 5- or 7-year depreciation. Land improvements include items like sidewalks, parking lots, and landscaping. These fall under a 15-year schedule. The building structure remains on the standard 27.5- or 39-year schedule.
Our team starts by reviewing your property documents. This includes construction costs, purchase agreements, and blueprints. We identify which assets can be reclassified. We use engineering methods to assign accurate values to each component.
After the study, we prepare a detailed report. The report includes asset classifications, cost breakdowns, and depreciation schedules. We follow IRS guidelines to ensure compliance. Your tax preparer can then use this report to adjust depreciation in your tax return.
Cost segregation increases deductions in the early years of ownership. This creates immediate tax savings and better cash flow.
You can use this service for new buildings, property purchases, renovations, and even older properties. In some cases, you can apply cost segregation retroactively and claim missed deductions.
Depreciation Acceleration Based on Your Property Type
The amount of accelerated depreciation depends on your property type. Each category—residential, commercial, industrial, or special-use—has different components that qualify for shorter tax lives. Cost segregation allows you to shift more of the cost into 5, 7, or 15-year asset classes.
The table shows typical ranges of how much of a property’s cost can be reclassified for faster depreciation, based on property type.
| Property Type | Depreciation Acceleration |
|---|---|
| Apartment Building | 20-40% |
| Assisted Living Facility | 22-45% |
| Auto-Car Dealership | 29-35% |
| Bank | 30-45% |
| Car Washes | 75-100% |
| Gas Stations | 50-100% |
| Conference Center | 25-35% |
| Fitness Center | 22-45% |
| Golf Course | 28-60% |
| Grocery Store | 20-45% |
| Hospital | 25-45% |
| Leasehold Improvements | 20-40% |
| Manufacturing | 18-40% |
| Medical Office/Clinic | 20-40% |
| Mixed Use | 22-35% |
| Mobile Home Parks | 20-40% |
| Office Building | 20-40% |
| Research Facility | 20-30% |
| Hotel & Resorts | 22-45% |
| Restaurant | 25-45% |
| Retail Strip Mall | 20-40% |
| Self Storage Facilities | 18-90% |
| Theme Park | 30-68% |
| Vacation Rentals | 25-45% |
| Warehouse | 20-30% |
Why choose InnovatexAI for Cost Segregation?
InnovatexAI delivers accurate and IRS-compliant cost segregation studies backed by technical expertise. Our team includes tax professionals, engineers, and analysts who understand how to break down your property in a way that supports maximum tax savings. We focus on real results—more deductions, better cash flow, and clear documentation you can rely on during filing or audit.
We serve accounting firms, real estate investors, and property owners across the U.S. Our reports follow IRS standards and include full support for your CPA or internal tax team. Whether it’s a newly purchased building or a renovation done years ago, we provide clear answers and fast turnaround.
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We Work with Clients Across the US
InnovatexAI supports businesses and accounting professionals in every state. Our team delivers accurate reports, fast responses, and dependable service—wherever you are.
Speak with a local specialist today and start saving on your taxes.
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