Sample renovation / improvement cost segregation report
A real, redacted Cost Seg Smart renovation & capital improvements (property you already own) study, shown so you can see exactly what the deliverable contains and how the component allocation works. The numbers below come from one illustrative Tampa, FL example.
Renovation / Improvement cost segregation reclassifies depreciable basis from the 27.5-year shell into 5-, 7-, and 15-year MACRS classes, which 100% bonus depreciation makes deductible in Year 1. There is no single expected percentage. In this one illustrative Tampa, FL sample on $300,000 of basis, $224,698 (74.9% of basis) was reclassified into accelerated classes, for an illustrative Year-1 deduction of about $226,638. Your result depends on property age, finishes, equipment, and land value.
This Tampa, FL study, by the numbers
One illustrative sample, not a benchmarkThis sample is a FICTIONAL $300K renovation (kitchen + outdoor living + landscape) generated to demonstrate the deliverable, with its fictional source invoices published alongside it. The basis is total documented improvement cost, not a property purchase price — your result depends entirely on your documented scope. Request the full sample PDF →
How to read this sample (it's a workpaper, not a brochure)
The 18-page study walks a CPA from source documents to a filing-ready schedule. As you page through, you'll see:
- ✓ Executive summary — purpose, method, results, and the year-1 bridge in one page
- ✓ Reconciliation — every submitted dollar appears exactly once; the study won't deliver otherwise
- ✓ Recovery schedules + a fixed-asset entry schedule your software can ingest directly
- ✓ A QIP gate page — explicit even when (as here, residential) it's not applicable
- ✓ Line-item detail — direct cost, allocated indirects, final basis, and the authority chain per line
- ✓ An evidence manifest citing the invoice and page behind all 21 cost lines — open the published invoice pack alongside it and follow any dollar
That invoice-to-schedule traceability is the point: nothing is modeled from square footage, and nothing is estimated from a walkthrough. Your study reads the same way — built from your documents.
Illustrative component allocation
A renovation study classifies DOCUMENTED improvement cost — no land, no purchase-price shell to dilute the result. Outdoor work (pool, deck, landscape) lands at 15-year; appliances and removable flooring at 5-year. Below is how this one sample report split its $300,000 depreciable basis across MACRS classes (Section 3 of the deliverable lists every component line by line).
| MACRS class | Allocated basis | % of basis |
|---|---|---|
| 5-Year Personal Property Appliance package, vinyl plank flooring (incl. allocated indirects) | $23,698 | 7.9% |
| 15-Year Land Improvements Pool, spa, deck, patio, fencing, landscaping, irrigation, exterior lighting | $201,000 | 67% |
| 27.5-Year Building Residual Interior structural work, plumbing, and cabinetry (conservative hold) | $75,302 | 25.1% |
| Accelerated (5/7/15-year) | $224,698 | 74.9% |
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 renovation / improvement properties reclassify the same. The 74.9% 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 renovation / improvement study delivers the same six-section structure, so your CPA can file without rework. Depth scales with property size and lookback complexity.
Executive summary
The one-page summary your CPA reads first: total reclassified, the Year-1 deduction, and the technical-review sign-off.
Engineering methodology
Shows why each asset was assigned its depreciation class, and documents the reasoning behind every allocation.
Component allocation tables
Every component (typically 40 to 80 line items) mapped to its asset class and MACRS life, with subtotals that reconcile to the depreciable basis.
Depreciation schedules
Year-by-year MACRS deduction tables, formatted to drop straight onto Form 4562, with bonus depreciation flagged for the placed-in-service year.
Section 481(a) lookback workpaper
For a Form 3115 catch-up: the cumulative Section 481(a) adjustment and a line-by-line reference for your tax preparer (when applicable).
Documentation and audit support
A cost-source citation for every component, the classification rationale, and a ready-made response pack for examiner questions. 36 months of support included.
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 the final section supplies a ready-made examiner-question response pack.
Every study includes 36 months of audit support 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
Is this a real renovation / improvement cost segregation report?
What reclassification percentage should I expect for a renovation / improvement?
Can I download the sample PDF?
Does the report include Form 3115 for a lookback?
How is this different from a benchmark or a percentage range?
See your renovation / improvement's real numbers, not a sample's.
We model your specific property before you pay. Order an engineered study or request the full illustrative renovation / improvement sample PDF first.
Estimate your renovation / improvement savings · All report examples · Renovation cost segregation · Form 3115 walkthrough · Audit defense