Data Source & Sample Composition
All 412 studies in this dataset were generated using the Cost Seg Smart engine (version 2.2.0, calibrated 2026-03-14). The engine applies real RSMeans 2026 construction cost data, MACRS classification rules per Rev. Proc. 87-56, and the methodology described in the IRS Cost Segregation Audit Techniques Guide (Pub 5653).
Property characteristics — square footage, year built, purchase price, location, structural features — are drawn from real US metropolitan property profiles representative of typical investor purchases at each property type. The 260 total comprises the original 107 golden_batch fixtures, 20 condo and multifamily 5+ fixtures added 2026-04-27, plus 133 additional fixtures added 2026-04-28 to bring every property type to n=20.
Engine Pipeline (Cost Seg Smart v2.2.0)
The engine produces each study via a deterministic pipeline:
- Land valuation: User override → County assessor (with reliability gate) → Statistical (metro → state → national) prior. Land is excluded from the depreciable basis.
- Component library: Base $/SF costs from RSMeans 2026, segmented by residential (27.5-year long-term) or commercial (39-year long-term) construction.
- Multiplier stack: Geographic cost factor × quality multiplier × property-type adjustment × construction era profile × STR intensity (FF&E uplift if applicable) × PPI time index × indirect cost (25%).
- Caps: 15-year residential cap (18%), office 5-year cap (28%, flag-gated). Caps prevent unrealistic over-acceleration on edge cases.
- Reconciliation: S = adjusted_basis ÷ total_unadjusted_RCN. S < 1.0 means the property's market basis is below modeled replacement cost; S > 1.0 means premium-market property exceeds RCN.
- Premium land floor: For statistical-only land valuation with rf_raw ≥ 2.0 (typical urban condo or premium STR), the engine enforces minimum land allocations: STR 50%, SFR 40%, MF 35%.
- QC gate: 16 automated quality-control checks classify each study PASS / REVIEW / FAIL, with a compound-OK downgrade rule for single soft flags.
Year-1 Federal Tax Savings Computation
Year-1 federal tax savings = (5-year basis + 7-year basis + 15-year basis) × bonus_depreciation × federal_marginal_rate.
Locked assumptions used throughout this report:
- Bonus depreciation: 100% — per the One Big Beautiful Bill Act, signed July 2025, which permanently restored 100% bonus for property placed in service after 2024.
- Federal marginal rate: 37% — top US individual bracket. Most relevant for high-income real estate investors who commission cost seg studies.
- State income tax: excluded — varies 0–13% by state. Including would obscure cross-state comparability.
- $500K normalization — for cross-property comparison, year-1 savings are scaled to a $500K purchase price. This isolates the property-type effect from the price effect.
Quality Control
Each study runs through 16 automated checks before inclusion. Checks fall into five reason-family categories: hard_invariant, market_regime, calibration_outlier, input_quality, and narrative_safety. Studies flagged FAIL are excluded entirely. Studies flagged REVIEW are included with the qc_status field preserved. PASS studies represent the cleanest data; the dataset's QC pass rate is 97% overall (with 100% pass in 7 of 13 property types).
Reconciliation Factor (S) and rf_raw
S is the engine's reconciliation factor: S = adjusted_basis ÷ total_unadjusted_RCN. By construction, S × total_unadjusted = depreciable_basis exactly.
rf_raw is a diagnostic ratio similar to S but inclusive of cost variance. Interpretation: rf_raw 0.4–0.7 typical US property pricing; 0.7–1.2 moderate market premium; 1.2–2.0 significant premium (urban condos); > 2.0 extreme premium triggers the engine's premium land floor.
Limitations
- Single engine version. Different engineering methodologies may yield reclassification splits within ±2–4 percentage points for the same property.
- Sample size. Each property type has n=20 in this v1.2 release. Per-type IQRs are reported in the main report alongside medians so readers can see real dispersion. Future releases will expand sample sizes further.
- Geographic coverage. National but uneven; metro-level breakdowns are not published in this release.
- Audit risk discussed qualitatively. No individual study in this dataset has been subjected to actual IRS audit.
- Year-1 savings assume 100% bonus depreciation. Property placed in service in 2023 (80%) or 2024 (60%) yields proportionally lower year-1 deductions.
License
Released under Creative Commons Attribution 4.0 International (CC-BY 4.0). Use, share, and adapt for any purpose, including commercial, with attribution.
Annual Refresh
The Benchmarks Report will be refreshed annually each Q1, with construction cost basis updated to the latest RSMeans release. v1: April 30, 2026. v2 planned: Q1 2027.
Contact
Citation requests, methodology challenges, or data inquiries: research@costsegsmart.com.