Services
Cost Segregation
At Parr & Ibarra, our cost segregation services are designed to help property owners unlock hidden tax savings by accelerating depreciation on their commercial and residential real estate. We understand that navigating IRS rules and construction cost breakdowns can be complex, which is why our team handles the technical and regulatory details for you—so you can focus on growing your investment portfolio. Using a blend of accounting expertise and engineering analysis, we identify and reclassify building components to shorter depreciation schedules, boosting cash flow and reducing your current tax burden. With our support, you gain access to detailed, audit-ready reports that support compliance while enhancing your long-term financial planning.
At Parr & Ibarra, we offer a full suite of cost segregation solutions designed to meet the needs of property investors, developers, and business owners. Each engagement is tailored to your property type, tax position, and long-term goals. Here’s what you can expect when working with us:
- Engineering-Based Cost Segregation Studies
- Tax Savings Analysis & Depreciation Schedules
- Fully-Documented IRS-Compliant Reports
- Lookback Studies & Catch-Up Depreciation
- Multi-Property Portfolios
- Strategic Advisory & Ongoing Support
This comprehensive approach ensures that you’re not just reducing taxes in the short term, but building a smarter, more efficient strategy for long-term real estate investment success.
Frequently Asked Questions
What is cost segregation?
Cost segregation is a tax strategy that allows real estate owners to accelerate depreciation deductions by reclassifying certain parts of a property—such as flooring, lighting, or land improvements—into shorter recovery periods (5, 7, or 15 years), instead of the standard 27.5 or 39 years.
What types of properties qualify?
Any income-producing property may qualify, including:
Commercial buildings (office, retail, industrial, etc.)
Residential rental properties (multifamily, single-family rentals)
Renovated or expanded properties
Newly purchased or constructed buildings
How much can I save?
Savings vary by property type and cost, but owners can often reclassify 20–40% of their building’s cost to shorter lives. This can result in tens or even hundreds of thousands of dollars in additional first-year depreciation.
How do I know if cost segregation is right for me?
If you’ve recently purchased, constructed, or renovated a property—or if you own real estate worth over $500,000—there’s a strong chance a cost segregation study can benefit you.
Can I do a study on a property I’ve owned for years?
Yes. We can perform a lookback study and apply “catch-up” depreciation all in the current tax year, without amending past returns, using IRS Form 3115.
Is cost segregation only for large companies or real estate developers?
Not at all. While large property owners certainly benefit, cost segregation is just as powerful for small business owners, rental property investors, and entrepreneurs looking to reduce taxable income and increase cash flow.
More FAQs here.
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