CostSegHQ

CostSegHQ — a TaxHQ company

Your building isn't one asset.
Stop depreciating it like one.

Cost segregation splits a property into its real components — 5-year fixtures, 15-year land improvements, and the long-life shell — so years of depreciation land in year one instead of year thirty. Move the slider and watch it happen.

Your property

Estimated first-year deduction

$165,750

Cash tax saved

$61,328

How your basis reclassifies

$600,000 depreciable basis

5-year$90,000
Appliances, carpet, decorative lighting, fixtures
15-year$60,000
Paving, fencing, landscaping, exterior lighting
27.5/39-year$450,000
Structure, roof, load-bearing, HVAC ductwork
Build the engineered study — free

100% bonus depreciation applies in 2026. Component-level study typically beats this estimate.

Estimate is free and needs no account. The full component study is free with an account — you only pay when you download the engineered report.

The same deduction, at about an eighth of the cost

Traditional engineered study

~$4,000

  • Weeks of turnaround, scheduled around an engineer
  • On-site inspection and travel billed to you
  • Quoted per engagement — you commit before seeing a number

CostSegHQ

$495 one-time, per property

  • Build the full study in minutes, free
  • Component catalog with tax-court and Rev. Proc. citations
  • Pay only when you download the filing-ready PDF
Start your study

Software-generated from your component costs — not a substitute for an engineered site inspection. Review with your tax adviser before filing.

§ 481(a) look-back

Bought years ago? You haven't missed it.

You don't amend a single return. A look-back study compares what you should have depreciated against what you actually claimed, and deducts the entire difference in the current year through an automatic accounting-method change (Form 3115, Rev. Proc. 2015-13).

Properties placed in service from 2018 through 2022 are the sweet spot — bonus depreciation ran at 100% in those years, so the catch-up is at its largest.

Run a look-back study

What a catch-up looks like

  1. 1

    Property placed in service, 2019

    Depreciated straight-line as one 27.5-year asset ever since.

  2. 2

    Study reclassifies the components

    Recomputed as if cost segregation applied from day one — at 2019's 100% bonus rate.

  3. 3

    Difference deducted this year

    Every missed year lands in the current return as one negative § 481(a) adjustment. No amended returns.

What your CPA receives

One PDF, structured the way a preparer reads it — every figure traceable to the authority it came from.

  1. 01

    Allocation by MACRS class

    Basis and share in each recovery class, reconciled to your total depreciable basis.

  2. 02

    Classified components

    Every line item with its class and the case or Rev. Proc. behind it — Hospital Corp., Metro National, 87-56.

  3. 03

    Year-one deduction

    § 179, bonus depreciation at the correct year's rate, and MACRS — split out, not lumped.

  4. 04

    Full depreciation schedule

    Every year through the end of the longest life, with lifetime totals.

  5. 05

    § 481(a) adjustment

    For look-backs: the catch-up computation and the Form 3115 basis for taking it.

  6. 06

    Methodology & scope

    Conventions, elections, authorities, and the limits of a software-generated study.

The math cites its sources

Rev. Proc. 87-56 — asset classesRev. Proc. 87-57 — MACRS tables§ 168(k) — bonus depreciation, incl. OBBBA 2025§ 179 — expensing election§ 168(d)(3) — mid-quarter conventionHospital Corp. of America, 109 T.C. 21§ 481(a) / Form 3115 — method change§ 1245 — recapture on sale

The questions everyone asks

Will this actually cut my tax bill, or just get suspended?
That depends on § 469, not on the study. Rental losses are passive by default and can't offset W-2 income unless you qualify — through the short-term-rental exception or Real Estate Professional Status. Our free REPS qualifier tells you which side of that line you're on before you spend anything.
What happens when I sell?
Accelerated depreciation is recaptured — the § 1245 portion as ordinary income, the building portion as unrecaptured § 1250 at up to 25%. Cost seg is a timing play, and a 1031 exchange can defer the reckoning. TaxHQ's Property Sale tool models the exit before you commit.
Does this raise my audit risk?
Cost segregation is an IRS-recognized method with its own Audit Techniques Guide. What draws scrutiny is an unsupported allocation — which is exactly why every line in the report carries its class and citation.
Which properties are worth it?
Generally $200k+ of depreciable basis, held rather than flipped, and owned by someone who can actually use the deduction this year. Short-term rentals and commercial buildings tend to segregate the most. Run the estimate above — it's free, and it will tell you quickly if the answer is no.
Do I still need my CPA?
Yes, and that's the point. The report is built to hand over: your preparer takes the schedule and, for look-backs, files the Form 3115. We do the engineering-and-classification work, not the filing.

See what it does to your whole return

CostSegHQ is a TaxHQ company, and it's one login. Your study flows straight into TaxHQ's Forecaster — federal and state impact, the § 469 passive rules, and the recapture when you sell.

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