Who Performs a Cost Segregation Study?

A Guide for Real Estate Investors and Business Owners

If you've been studying real estate investing or business tax strategies, you've likely stumbled across the term "cost segregation study." It's a powerhouse tool that can accelerate depreciation deductions, potentially saving you thousands, or even tens of thousands of dollars in taxes. Amid the excitement, there is a common recurring question: Who exactly handles a cost segregation study?  

The short answer is that it takes a specialized professional with the right expertise to deliver accurate, IRS-compliant results. Let's break it down step by step, so you can understand what to look for and how to choose the right partner for your project. 

What Is a Cost Segregation Study, Anyway? 

Before we get to the “who”, let’s review the “what”.  A cost segregation study is an engineering-based analysis that breaks down the cost of your property (like a commercial building, rental home, =manufacturing facility, and more) into its individual components. Instead of depreciating the entire asset over 39 years (for non-residential real estate), the study reclassifies shorter-lived assets, like carpeting, lighting fixtures, or HVAC systems into 5-, 7-, or 15-year categories. The result? Faster write-offs and improved immediate cash flow. 

The IRS encourages these studies (check out Revenue Procedure 87-56 for the green light), but they must be thorough and defensible. That's where hiring the right expert becomes imperative. 

Who Performs a Cost Segregation Study? The Key Players 

Not just anyone can perform a cost segregation study. It requires a blend of tax knowledge, engineering principles, and construction insight to ensure the breakdown holds up under audit.  

Here's who typically handles these: 

1. Certified Public Accountants (CPAs) with Tax Specialization   

CPAs are often at the helm because they understand the tax code inside and out. They ensure the study aligns with IRS guidelines and integrates seamlessly into your overall tax strategy. Look for CPAs who aren't just generalists—seek those with deep experience in real estate depreciation and cost segregation specifically. 

2. Engineers and Construction Experts 

The "segregation" part isn't guesswork; it's rooted in site inspections and detailed asset analysis. Licensed engineers or construction consultants provide the technical backbone, valuing components based on blueprints, cost data, and physical walkthroughs. 

3. Multidisciplinary Firms or Teams   

Many top providers are firms that combine CPAs, engineers, and appraisers under one roof. This collaborative approach minimizes errors and maximizes the study's value. Certifications like membership in the American Society of Cost Segregation Professionals (ASCP) signal a commitment to industry best practices. 

In essence, the ideal provider is a team that's performed hundreds (or thousands) of studies, delivering results that are not only aggressive but audit-proof. 

Why Expertise Matters: Choosing a Provider You Can Trust 

With so many options out there—from big accounting firms to boutique specialists—it's easy to feel overwhelmed. The key is vetting for proven track records. Does the firm have decades of combined experience? Have they navigated complex properties like multi-family units or historic renovations? And crucially, do they stay current with evolving tax laws? 

At Veritax Advisors, we're proud to embody that expertise. As a firm dedicated to cost segregation studies, we're led by a seasoned CPA with over 30 years in the field and 15 years laser-focused on cost segregation.  This isn't just about numbers; it’s about crafting strategies that have helped countless clients realize significant tax savings. Guiding our team is a Member of the American Society of Cost Segregation Professionals, ensuring every study adheres to the highest standards of accuracy and compliance. 

Whether you're a real estate investor eyeing your next acquisition or a business owner retrofitting an office space, partnering with a team like ours means peace of mind. We've seen firsthand how a well-executed study can transform your financial picture, often paying for itself in the first year through tax savings. 

Ready to Maximize Your Depreciation? 

If you're asking, "Who does a cost segregation study?" because you're ready to take action, the answer is simple: It should be a trusted expert who turns complexity into opportunity. At Veritax Advisors, we're here to make that happen for you. 

Contact us today for a free consultation, and let's explore how a cost segregation study can supercharge your bottom line. Got questions in the meantime? Drop a comment below or send an email, we're always happy to chat taxes!