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Cost Segregation
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The rules surrounding cost segregation are a bit complicated and are easily misinterpreted, resulting in improper allocations, and possibly incorrect...
A cost segregation study is a powerful tax planning tool for real estate investors and owners. This method allows for...
You understand as a real-estate investor the importance of managing tax liabilities to maximize your profits. Cost Segregation Study is...
Ways We Can Help
Our Services
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
Knowledge Center
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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