Sample new construction cost segregation report

A real, redacted Cost Seg Smart newly constructed building (you built it, from a cost schedule) study, shown so you can see exactly what the deliverable contains and how the component allocation works. The numbers below come from one illustrative Winter Garden, FL example.

This sample is a FICTIONAL custom single-family build in central Florida, generated from an invented builder cost schedule to demonstrate the deliverable. The 31 submitted ledger lines became 28 classified components plus 3 indirect allocations, reconciled to the cent. Your result depends entirely on your own documented scope, property type and jurisdiction. Request the full sample PDF →

How to read this sample (it's a workpaper, not a brochure)

The 66-page study walks a CPA from the builder's cost schedule to a filing-ready depreciation schedule. As you page through, you'll see:

• ✓ Executive summary — purpose, method, results, and the year-1 bridge in one page
• ✓ Indirect Cost Allocation — how the builder fee, general conditions and permits ride pro-rata onto the direct costs they made possible
• ✓ Reconciliation of Costs — every submitted dollar appears exactly once, tied out to the declared construction cost
• ✓ Line-item detail showing direct cost, allocated indirects, and final basis per component
• ✓ MACRS recovery schedules plus a fixed-asset entry schedule your software can ingest directly
• ✓ A cost derivation appendix stating plainly that basis came from the taxpayer's own construction records rather than a cost model

That ledger-to-schedule traceability is the point. On a purchased building the study has to work backwards from one number; here it works forwards from the numbers your builder already produced.

Illustrative component allocation

A construction ledger classifies DOCUMENTED cost line by line, so nothing is modeled from square footage and nothing is scaled to fit an estimate. Soft costs (general conditions, builder fee, permits) are allocated pro-rata across the direct costs rather than stranded in the shell. Land is the lot closing, not an estimated share. Below is how this one sample report split its $925,250 depreciable basis across MACRS classes (Section 3 of the deliverable lists every component line by line).

Where the depreciation comes from

Illustrative result from one sample report. Actual reclassification varies substantially with property age, improvements, tenant finish, equipment, land value, and other facts. Not a benchmark or expected range. Tax-side figures assume the placed-in-service year's §168(k) bonus rate and an assumed entity rate; actual depends on entity structure, state conformity, passive-activity limits (§469), and at-risk basis (§465). Verify with your CPA before filing.

Why your result will differ from this example

No two new construction properties reclassify the same. The 31.9% above came from one specific building. Yours depends on:

• → Property age — newer buildings carry more reclassifiable finishes and systems.
• → Renovations and tenant improvements — recent build-outs add 5- and 7-year assets.
• → Equipment intensity — equipment-heavy uses (kitchens, service bays, medical) reclassify more.
• → Site work — extensive paving, parking, and landscaping drive the 15-year bucket.
• → Land value — a higher land share leaves less depreciable basis to reclassify.
• → Local construction costs and finish level — these shift each component's allocated basis.

That is why we model your specific property before you commit, and never apply a rule-of-thumb percentage. The IRS Cost Segregation Audit Techniques Guide (Pub 5653) warns against template and rule-of-thumb studies for exactly this reason.

Why CPAs file straight from these reports

Every new construction study delivers the same six-section structure, so your CPA can file without rework. Depth scales with property size and lookback complexity.

How the report addresses IRS examiner standards

The IRS Cost Segregation Audit Techniques Guide (Pub 5653) lists the elements an examiner reviews, and the report maps to each one: the engineering methodology and component allocation document every classification, each component carries a Rev. Proc. 87-56 asset-class citation with its rationale, and Appendix B walks all 13 elements of Pub 5653 Chapter 4 one at a time, naming the report section that satisfies each. Appendices C and D carry the Rev. Proc. 87-56 / IRC framework and the supporting case law and IRS rulings; Appendix E covers workpaper retention and the records to keep alongside the report.

Every study includes audit documentation, and written answers to your CPA's technical questions for the life of the study, at no additional charge. Full scope at /audit-defense/.

How this compares with traditional firms

Traditional-firm figures are typical industry ranges; confirm pricing and scope directly with any vendor. For the full firm-by-firm breakdown see best cost segregation companies.

Report questions

See your new construction's real numbers, not a sample's.

We model your specific property before you pay. Order an engineered study or request the full illustrative new construction sample PDF first.

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