Advisory Service
Cost Segregation
Reclassify components of your commercial property from 39-year to 5–15-year depreciation. Six-figure first-year deductions are common on $1M+ properties.
What it is
Cost segregation is an engineering-based study that identifies parts of a commercial building — electrical systems, decorative finishes, landscaping, specialized HVAC — that can be depreciated over shorter lives than the standard 39 years for commercial real estate (or 27.5 for residential rental).
We coordinate the study with a credentialed engineering firm, apply the results to your tax return, and handle the Form 3115 change in accounting method when the study is retroactive. The engineering work and the tax application are two different pieces — we do the second; we manage the first.
Who it's for
- Owners of commercial property worth $500K or more
- Real estate investors with renovations over $200K
- Anyone who bought commercial property in the last 3 years without doing a cost seg study (retroactive Form 3115 catch-up still available)
- Owners planning to hold property at least 3–5 years
What's included
- Eligibility assessment — is your property a candidate?
- Engineering firm coordination (we partner with credentialed providers)
- Cost segregation study review and validation
- Tax return application — Year 1 deduction calculation
- Form 3115 change in accounting method for retroactive look-back studies
- Coordination with your prior CPA's depreciation schedules
Engagement note
JMCPA coordinates and applies the results of cost segregation studies. The engineering report itself is produced by a credentialed cost segregation provider, not by JMCPA in-house. We tell you up front who's doing what.
How pricing works
Engagement-based. The engineering study itself typically runs $5K–$15K depending on property complexity. The tax application work is scoped separately. ROI is almost always 10:1 or better — if it's not, we'll tell you before you spend a dollar on the study.