The Short Answer
- You need 6 pieces of information: purchase price, closing date, address, year built, property type, and renovation history
- Most investors can provide everything in about 5 minutes
- Your cost seg provider handles all engineering analysis, data collection, and report generation
- Closing statements and tax assessments help but are not required
Most investors overthink this. A cost segregation study requires surprisingly little from you. Your provider handles the engineering analysis, construction cost research, and IRS classification work. You provide the basic property details—the same information you already know from buying the property.
There's a persistent misconception that ordering a cost seg study means digging through filing cabinets for blueprints, scheduling a property inspection, or gathering a stack of construction documents. That's not how modern studies work. Here's what you actually need.
What You Need to Provide
Six items. All of them are things you already know or can pull from your closing documents in a few minutes.
- Purchase price The amount you paid for the property. This establishes the total basis that gets allocated between land and depreciable improvements.
- Closing date The date the property was placed in service. Determines the tax year for depreciation and any bonus depreciation eligibility.
- Property address Full street address. Used to pull county assessor data, satellite imagery, and geographic cost adjustments.
- Year built Original construction year. Affects component useful life estimates and construction cost indexing.
- Property type SFR, STR/Airbnb, duplex, condo, multifamily, office, retail, etc. Determines which component library and classification rules apply.
- Renovation history Any major renovations and their approximate cost. Kitchen remodel, roof replacement, addition—if it happened, note it. If none, that's fine too.
That's it. Five minutes of information that most property owners can provide from memory. No blueprints, no site visit, no construction documents.
What Your Provider Handles
The heavy lifting in a cost segregation study is the engineering analysis, not the data collection from you. Here's what a qualified provider does with the six inputs you provide:
Square footage, lot size, construction type, assessed values, and building characteristics pulled from public records.
Property footprint, site improvements, landscaping, driveways, patios, pools, and other 15-year land improvements identified remotely.
RSMeans cost data adjusted for geography, property age, and construction type. This establishes replacement cost at the component level.
Every building component classified into its correct MACRS recovery period (5, 7, 15, 27.5, or 39 years) per IRS guidelines.
Multi-source pipeline using assessor data, statistical metro models, and property-specific adjustments to separate land from depreciable basis.
A 30+ page PDF with depreciation schedules, component-level breakdowns, and methodology documentation ready for your CPA to file.
The provider's job is to take your basic property information and produce an IRS-defensible report that your CPA can use to reclassify assets on your tax return. You don't need to understand RSMeans cost data or Rev. Proc. 87-56 asset classifications. That's what you're paying for.
Documents That Help but Aren't Required
Certain documents can improve the accuracy of your study. If you have them handy, include them. If you don't, your provider can still produce a complete, defensible report without them.
Confirms the exact purchase price, closing date, and any seller credits or adjustments. Most useful when the transaction had unusual terms.
Shows the county's land vs. improvement split, which helps calibrate the land valuation. Especially useful when the assessed land ratio differs significantly from statistical models.
If you've done significant work (kitchen remodel, addition, major systems replacement), invoices help quantify the improvement and classify components accurately.
Helps identify room counts, specialty spaces (home theater, wine cellar, commercial kitchen), and building layout. Satellite imagery covers most of this, but floor plans add interior detail.
None of these are blockers. A study can proceed without any of them. They're refinements, not requirements. If you're debating whether to spend an hour hunting for your 2019 closing disclosure, the answer is: don't. Order the study now and provide it later if you find it.
For Look-Back Studies
If you've owned the property for one or more years and never had a cost segregation study done, you can still capture the missed depreciation through a look-back study. Your CPA files Form 3115 to claim a catch-up deduction in the current tax year—no amended returns needed.
For a look-back study, you'll need the same six items above, plus:
- The year you placed the property in service (your first tax year claiming depreciation)
- Your current depreciation schedule from your CPA or tax preparer
The depreciation schedule shows what you've already claimed, so the study can calculate the exact catch-up amount. If you don't have it readily available, your CPA can pull it from your prior returns.
What CostSegSmart Specifically Needs
Our process is designed around the reality that investors don't want to hunt for documents. Here's how it works:
From Order to Report
No phone calls. No site visits. No back-and-forth requesting documents you can't find. The study is priced transparently based on property type and purchase price—starting at $795 for residential properties.
If you have a closing statement or tax assessment and want to upload it, we accept those too. They can refine the land valuation. But they're not gatekeepers to getting started. To see what your property's depreciation breakdown might look like before ordering, run the free calculator—it takes 60 seconds.
Frequently Asked Questions
Six basic inputs: purchase price, closing date, property address, year built, property type, and any renovation history. These are the same details you collected when you purchased the property. Supporting documents like a closing statement (HUD-1 or Closing Disclosure), tax assessment, or renovation invoices can improve accuracy but aren't required to get started.
No. A property appraisal is not required. Cost segregation providers use the purchase price as the primary valuation input and supplement it with county assessor data, construction cost databases, and satellite imagery. An appraisal can be useful in rare cases where the purchase price is significantly different from fair market value (a below-market family transaction, for example), but it's not a standard requirement.
About five minutes. Most property owners know their purchase price, closing date, address, year built, and property type from memory. Renovation history is the only item that might require a moment of thought—and "no major renovations" is a perfectly valid answer. There are no complex forms, no blueprints to locate, and no inspections to schedule.
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Look-Back Studies: Claiming Missed Depreciation
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