In real estate, cutting corners often costs more in the long run. A “bargain” cost segregation study may look like a win today, but it can lead to missed deductions, audit trouble, and lost cash flow tomorrow.

If you plan to accelerate depreciation and maximize 100% bonus depreciation, here’s why you should choose quality over cost — and how to spot the difference.

The Risks of Going Cheap

Cost segregation is both an engineering and tax exercise. Done right, it identifies every eligible building component and reclassifies it for faster depreciation under IRS rules. Done wrong, it can cost you six figures.

Here’s what can go wrong with a low-cost provider:

• Incomplete asset identification: Critical components — from electrical systems to land improvements — may be overlooked or misclassified, costing you substantial deductions.
  
• Weak documentation: The IRS requires detailed backup in case of an audit. Many budget providers skip this step entirely.
  
• Non-compliance with IRS Audit Techniques Guide (ATG): This guide is the IRS’s own playbook. If your study doesn’t meet these standards, it can lead to disallowances during audit and draw out review processes.
  
• Overly aggressive allocations: Inflating short-life asset values to “look good” now can lead to costly penalties later.
  
  

What a High-Quality Study Delivers

A professional, IRS-compliant cost segregation study will include:

• A site visit or detailed review of architectural drawings and construction records
  
• Engineering-based calculations — not guesswork
  
• Correct classification using MACRS guidelines
  
• Thorough documentation to defend your position under audit
  
• Collaboration with your CPA to ensure the study aligns with your overall tax strategy
  

With a quality study, you’re not just getting a report — you’re getting audit-ready protection and maximizing every deduction you’re entitled to claim.

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Why This Matters for Your Bottom Line

Think of it this way: You wouldn’t buy a property without an inspection or hire the cheapest contractor for a major renovation. Your tax strategy deserves the same care.

A high-quality cost segregation study is an investment that:

• Recovers 20–40% more in deductions than a rushed or incomplete study
  
• Safeguards you in the event of an IRS review
  
• Ensures you can fully leverage bonus depreciation without risk
  
  

Protect Your Deductions

We help property owners avoid risky shortcuts and identify every eligible asset for faster depreciation. Our studies follow IRS ATG standards, pair seamlessly with bonus depreciation, and are built to stand up in an audit.

You worked hard for your property — let’s make sure your tax strategy is just as strong.

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