Education
What Is Cost Segregation?
Franklin Tax Group is a specialty firm focused entirely on cost segregation.
The 27.5 and 39-year problem
When you buy or build commercial or residential rental property, the IRS default is to depreciate the entire building over 27.5 years for residential rental, or 39 years for commercial. That's slow, and it means a big share of your deductions sit on the sidelines for decades.
A cost segregation study is an engineering-based analysis that identifies portions of your property that legally qualify for much faster depreciation, typically 5, 7, and 15-year lives. Instead of one long straight line, you get accelerated deductions in the early years when they help most.
The Difference, Visualized
Straight-line vs. accelerated depreciation
Same property. Same total deduction. Very different timing.
Illustrative only. Actual results depend on property type, basis, and other factors.
Who Benefits
If you own commercial property, this likely applies to you.
Commercial Building Owners
Existing owners holding for the long term who want to unlock deductions now.
Recent Purchasers
Anyone who has recently acquired commercial or income-producing property.
New Construction
Newly built properties where component costs are readily available.
Renovations & Improvements
Substantial renovations, buildouts, and tenant improvement work.
Even properties purchased years ago can qualify.
Through a look-back study and a Section 481(a) adjustment, missed depreciation can often be captured in the current tax year, no amended returns required.
- No amended returns
- Catch-up deduction in the current year
- IRS-sanctioned method change
- Works alongside your CPA
Ready to see what your property could unlock?
Free, no-obligation estimate. We work alongside your CPA.