At KAJMST, we specialize in delivering high-quality cost segregation studies that help real estate owners like you accelerate depreciation deductions and boost cash flow. Cost segregation involves reclassifying building components—such as fixtures, landscaping, and mechanical systems—into shorter depreciation periods (5, 7, or 15 years) rather than the standard 27.5 or 39 years for the entire structure. This strategy can unlock significant tax savings, especially with the evolving tax landscape in 2025, including changes to bonus depreciation.
As a leading cost segregation provider, we've helped countless clients identify and capitalize on these opportunities. Whether you're managing commercial properties, multifamily units, or industrial spaces, our engineering-based studies ensure IRS compliance while maximizing your returns. Below, we share our step-by-step guide to spotting qualifying properties, followed by a handy checklist to get you started.
Our Step-by-Step Approach to Spotting Qualifying Properties
- Audit Your Real Estate Portfolio Begin by reviewing all your holdings. At KAJMST, we work with properties acquired, built, or placed in service recently and or several years ago. Retroactive applications via Form 3115 allow us to revisit older assets, and owners can “catch-up” on depreciation.
- Evaluate the Depreciable Basis The basis (purchase price minus land value) of your property is needed to determine viability. Properties exceeding $500,000 in basis are our sweet spot, where tax savings far exceed study costs (typically $5,000–$20,000). Even for smaller assets, if personal property components are high, we can deliver strong ROI.
- Pinpoint Recent Renovations and Improvements Our team excels at segregating costs from remodels, expansions, or tenant improvements over $200,000–$300,000. In 2025, we leverage 100% bonus depreciation for qualified property placed in service after January 19, combining it with cost segregation for optimal results.
- Analyze Property Type and Segregable Assets Commercial, residential, and industrial properties yield the best results in our experience, with 20–40% of costs often reclassifiable. We review blueprints and appraisals to identify items like specialized plumbing or site work, ensuring every eligible component is captured.
- Align with Your Tax Profile and Deadlines We assess your tax bracket and potential limitations (e.g., passive losses) to confirm value. For 2025, bonus depreciation shifts to 40% before January 20 but returns to 100% afterward—timing is key, and our experts model scenarios to guide your decisions.
- Compile Records and Partner with Us Gather documents like purchase agreements, blueprints and invoices. Then, let KAJMST handle the rest: Our engineers complete detailed analyses, avoiding common pitfalls and preparing audit-ready reports.
KAJMST's Checklist for Real Estate Owners
Use this checklist to identify prime candidates—contact us if several apply:
- Basis Threshold: Depreciable basis > $500,000?
- Timing of Acquisition: Acquired/placed in service post-2017 or targeted for 2025 bonus rules?
- Improvements: Recent renovations > $200,000 (e.g., energy upgrades or interiors)?
- Property Category: Commercial/multifamily/industrial with significant fixtures (20%+ of costs)?
- Bonus Eligibility: Assets qualifying for 100% write-off post-January 19, 2025?
- Documentation: Ready with statements, plans, and breakdowns?
- ROI Potential: Deductions likely to exceed study costs (often 10:1 or better)?
- Expert Consultation: Ready to discuss with KAJMST for a free feasibility assessment?
If your properties check most boxes, you're positioned for impressive savings.
At KAJMST, we're committed to turning your real estate investments into tax-efficient powerhouses. With rising values and dynamic laws, now's the time to act—reach out for a no-obligation consultation to explore how we can tailor a study to your needs. Let's optimize your portfolio together.