Office, retail, restaurant, industrial, mixed-use, medical office, hotels, warehouses, self-storage. Engineer-reviewed where the property warrants. RSMeans cost data. MACRS classification per Rev. Proc. 87-56 and the IRS Audit Technique Guide.
Multi-property and portfolio rates available. Industrial >$5M and any specialty asset class includes engineer review. Contact us for portfolio quotes.
Each commercial subtype has different finish levels, mechanical systems, and 5/15-year reclassification potential. Our analysis tunes per subtype.
Tenant improvements, MEP risers, structured cabling, security systems, and finish-out are the principal 5/15-year contributors. Medical office adds plumbing, gas, and specialty equipment. Our engine applies a finish-score derived from $/SF, vintage, and OSM building-type signals to tune the analysis.
Storefronts, signage, parking lot improvements, exterior lighting, and HVAC zones drive 15-year reclassification. Multi-tenant retail benefits more from per-tenant finish than single-tenant. Site improvements (paving, landscaping, retention) can be substantial in standalone properties.
Restaurants are the highest-reclassification commercial subtype. Kitchen equipment, decorative finishes, signage, exhaust hoods, walk-in refrigeration, and FF&E are mostly 5-year personal property. Subtype scaling adjusts for QSR (lighter finish) vs full-service (heavier).
Industrial properties have lower reclassification rates because the building shell dominates basis. Site work (paving, retention, utilities) and specialty MEP (compressed air, dust collection, in-floor power) drive what's available. Our finish-score scales site-work allocation 0.40–0.95 based on actual finish level.
Each use is analyzed separately and weighted by sqft. Common areas (lobby, elevator, structured parking) get pro-rata allocation. Engineer review is recommended on mixed-use >$2M because basis allocation between uses materially affects the deduction.
Lobbies, FF&E, decorative finishes, signage, pool/spa, and back-of-house equipment yield strong 5-year fractions. Hotels above 50 keys typically warrant engineer review for the breakout between common areas, guest rooms, and amenity spaces.
Site work and security infrastructure (fencing, lighting, gate systems) drive the 15-year fraction. Climate-controlled facilities add HVAC and finish to the 5-year side. Multi-building campuses are analyzed per building when basis is split that way.
Component-level engineering analysis. The study breaks the property into 80+ depreciable components classified into 5/15/39-year MACRS recovery periods per Rev. Proc. 87-56 and the IRS Audit Technique Guide.
RSMeans 2024 cost data + geographic adjustment. Replacement costs are derived from the same engineering cost database used by traditional firms, with metro-level adjustment.
Subtype-specific tuning. Industrial finish-score, restaurant subtype scaling, office fitout mix, and era-based profiles ensure the analysis reflects what's actually in the property — not a generic commercial template.
Engineer-reviewed where required. Specialty asset classes (industrial, hotel, mixed-use), properties >$5M basis, and any property with non-standard construction get engineer review before the report ships. The cover page identifies whether a specific report was engineer-reviewed.
Remote observation methodology. The IRS does not require a site visit for engineering studies (per ATG). Our methodology uses public assessor data, OSM/satellite imagery, RSMeans cost tables, and remote-observation inputs. For properties where a site visit changes the answer, we'll flag and recommend one.
If your CPA receives an IRS notice questioning the cost segregation analysis, here's exactly what's included.
Owner-operators of commercial property in the $300K–$15M+ range. CPAs running cost seg for commercial clients (white-label option via the partner portal). Investors with recent acquisitions looking for accelerated Year-1 deductions. Owners with older property looking at lookback Form 3115 catch-up — we compute the depreciation correction in the same study.
Properties >$15M where the owner needs hand-walked, on-site, PE-stamped reports for ultra-conservative audit posture — KBKG and ETS are the right call. Specialty asset classes outside our enumerated list (e.g., data centers, cell towers, refineries) — contact us; we'll either handle the property with engineer review or refer you to a firm that specializes. Properties with significant condemnation or contamination affecting basis — we'll flag and recommend an on-site review.
Pricing scales with property value and asset class. Engineer-reviewed where complexity warrants. CPA-Ready guarantee. Free revisions for 60 days.