How it works
Your building is not one asset.
The IRS knows it.
Cost segregation splits a property into its components and depreciates each on its correct IRS timeline — 5 and 15 years for qualifying items instead of 27.5 or 39 for everything. Typically 15–55% of the depreciable basis (purchase price plus construction costs, less land), depending on property type, moves into short-life property, and with §168(k) bonus depreciation much of it deducts in Year 1.
Deductions you were always entitled to — arriving decades early.
Start your studyTwo to four short questions, then your order.
The process — five steps
A study works from the records your project already produced, and a site visit can be arranged by appointment.
Step 1
Two to four short questions, then your order
Say whether the study is for you, a family member or friend, or a client. An owner also says whether the purchase price plus construction costs total under $2.0 million; a CPA or advisor says whether the study comes from ClickDrag or their own firm. That sends you to the right next step.
Step 2
Upload your documents
Construction pay applications (AIA G702/G703), trial balance, closing statement, and photos. The trial balance is treated as the authoritative source for your basis.
Step 3
Component-level analysis
Every line item is classified into its IRS recovery period (5, 15, 27.5, or 39 years) against the IRS Audit Techniques Guide, with §168(k) bonus depreciation applied under the correct rules for your placed-in-service date. Every dollar traces to a source document.
Step 4
Fully documented deliverables
The $15,000 study delivers a full narrative report plus an Excel workbook with exhibits and year-by-year depreciation schedules; the low-cost workpaper is a narrative PDF with one summary table of each recovery class and the Year-1 deduction. Either way, the recovery classes reconcile to your depreciable basis to the penny.
Step 5
CPA handoff and support
With the $15,000 study, your depreciation schedule exports in a fixed-asset import format matched to your accounting software, and your CPA gets what they need to file. Questions after delivery are part of the service, not an upsell.
Who cost segregation is for — and who it isn't
A strong fit
- Commercial buildings — office, retail, industrial, medical
- Self-storage facilities (security systems, paving, fencing, site lighting and, as a contested position the IRS can challenge, unit roll-up doors)
- Multifamily and apartment communities
- Single-family rental / build-to-rent portfolios
- Short-term rentals used to offset active income
- Opportunity Zone projects capturing bonus depreciation inside the QOF hold
- Properties owned for years — via a look-back study (Form 3115)
Probably not worth it
- Your primary residence (not depreciable property)
- Properties you plan to sell within a year or two (recapture can offset the benefit)
- Owners with no tax liability the deduction can offset — timing may matter more than size
Not sure which side you're on? Ask your tax advisor before you order.
What it's worth — the planning bands our estimates use
The share of the depreciable basis (purchase price plus construction costs, less land) our estimates use by property type. A study of your property replaces them.
40–55%
planning band (not a promise), share of depreciable basis reclassified — self-storage facilities
20–30%
planning band, share of depreciable basis reclassified — multifamily
Year 1
is when most of it deducts, via §168(k) bonus depreciation
Want the arithmetic on your own numbers? Run the calculator or read the worked example: a $14M study, line by line.
Common questions
How is a ClickDrag Finance cost segregation study supported?
A ClickDrag Finance cost segregation study is built on the methodology in the IRS Cost Segregation Audit Techniques Guide: each component is traced to the invoice, pay application or other source document, or the documented cost estimate, it came from, each classification names the Rev. Proc. 87-56 asset class and recovery period behind it, the photographs the buyer supplies are linked to the components they support, and a qualified reviewer checks every classification before delivery. The study page, the Excel schedules and the PDF are checked against each other before delivery, so every surface carries the same numbers. The low-cost cost segregation workpaper, which is not a study, sorts the documents and photographs the buyer provides into the same recovery classes and is reviewed before release.
What is a cost segregation study?
A cost segregation study is a tax analysis that separates a building into its components and assigns each one its correct IRS recovery period. Instead of depreciating the entire purchase over 27.5 or 39 years, items like flooring, cabinetry, site utilities, and land improvements are reclassified into 5- and 15-year property — pulling deductions forward into the early years you own the building, when cash flow matters most.
Does a cost segregation study include a site visit?
A ClickDrag Finance cost segregation study can include a site visit, by appointment, and a visit is preferred, because the IRS Cost Segregation Audit Techniques Guide (Publication 5653, Chapter 4) describes a quality study as including one. When a site visit is not feasible because of cost or timing, the property is documented from its own records and from photographs linked to the components they support, and each photograph’s embedded date and location data are read and recorded.
I have owned my property for years — is it too late?
A look-back study lets you claim every year of missed accelerated depreciation at once, on your current-year return, using an automatic accounting-method change (Form 3115), with no amended returns, for a property you placed in service in an earlier tax year and still own. The catch-up deduction arrives in a single tax year.
How much of my building typically reclassifies?
It depends heavily on property type. Our planning bands, as a share of the depreciable basis (purchase price plus construction costs, less land), are typically 20–30% for multifamily, 20–30% for office, 25–35% for retail and 15–22% for industrial and warehouse property; self-storage typically reclassifies 40–55% of the depreciable basis (a planning band, not a promise). An individual property can fall outside its band, and a study of your property replaces the band.
Will a cost segregation study trigger an audit?
Cost segregation is an IRS-recognized method with its own IRS Audit Techniques Guide. What matters is support: component-level detail, source-document traceability, and schedules that reconcile to your basis exactly.
How long does a study take?
A full study — narrative report, exhibits, and depreciation schedules — is typically delivered 15–20 business days after your complete document set is in. The low-cost cost segregation workpaper, for a property whose purchase price plus construction costs total under $2.0 million, is typically ready 3–5 business days after all required documents are in.
Start your cost segregation study
Two to four short questions, then your order.
Get startedEducational content, not tax advice. Estimates are illustrative; consult a qualified tax professional before making tax decisions.