Multifamily
Your apartment building is full of faster deductions.
From a duplex to a 50-unit complex, the IRS default writes your building off over 27.5 years. A cost segregation study finds the parts that should not have to wait that long.
The baseline
27.5 years is the default. Not the rule for every part.
Residential rental property depreciates over 27.5 years by default. That schedule fits the shell: the frame, the roof, the walls. But an apartment building is more than a shell. The carpet in unit 4 does not last 27.5 years. Neither does the parking lot. The tax code gives many of those parts much shorter lives. A study sorts them out so you can claim those deductions sooner, when they help you most.
What reclassifies
Where the short-life parts hide in an apartment building.
Inside the units
Appliances, carpet and vinyl flooring, window coverings, and decorative light fixtures. These are the classic short-life parts, and apartments have a set of them in every unit.
Dedicated hookups and venting
The vents, gas lines, and connections that exist to serve a specific appliance. In the leading apartment case, dryer vents and dryer gas lines kept their shorter lives because the proof was there.
Outside the building
Parking and paving, sidewalks, fencing, landscaping, and site lighting. These are 15-year land improvements, and an apartment property usually has a full set of them.
Cabinets and countertops
Some studies push every cabinet and countertop to a short life. Court cases show those calls only stick when the evidence supports them. We classify these item by item, to the evidence, not to a wish list.
How much of the building moves to shorter lives depends on the property: the finishes, the site work, and what the records support. We would rather show you a real range for your building than quote a one-size number here. The free estimate does exactly that.
The honest part
Apartment studies get extra attention. Evidence wins.
In AmeriSouth XXXII v. Commissioner, the owner of a 366-unit complex used a study that split the property into more than 1,000 parts. The court denied about $1.08 million of the reclassifications, not because cost segregation is not allowed, but because nobody could tie the claimed assets to proof. The items that survived, like dryer vents and dryer gas lines, survived because the evidence was there.
IRS reviewers know this case well, and apartment studies draw particular attention because of it. That is why we classify line by line, with photos, records, and engineering support, so each deduction traces to evidence an examiner can check. See what makes a study audit-defensible.
- How we keep your study defensible:
- Every asset classified to a cited authority
- Photos and source records behind each line
- Built to the IRS's own quality guide (Pub 5653)
- Contested items flagged, not buried
One more thing
Can you use the loss this year?
A study can create a large paper loss. For a long-term rental, that loss is passive by default under Section 469, so it usually offsets other passive income, not your paycheck. Real estate professionals can escape that default, but the test is strict: more than half your working time and more than 750 hours in real property businesses, with material participation.
If you do not qualify this year, the loss is not lost. Suspended losses carry forward and free up later, including when you sell. How the loss lands in your return is a question for your tax advisor, and it is worth asking before you order a study.
See what your building is hiding.
Enter your property and see your savings range in seconds. Duplex or 50 units, the estimate is free and no call is required.