An engineering-based study,
built to hold up.

The IRS favors cost segregation grounded in engineering, not rules of thumb. Here’s how a study moves from a no-cost feasibility estimate to a detailed, defensible report your CPA can file from.

Start With a Feasibility Estimate

Why It Matters

Engineering-based, because the IRS says so.

The IRS’s own Cost Segregation Audit Techniques Guide favors studies built on an engineering analysis of the property and its costs, over “rule of thumb” estimates or simple percentages. That distinction is the difference between a study that holds up under examination and one that invites questions. Every study we deliver is engineering-based and fully documented.

Step by Step

How a study is done.

Feasibility & benefit estimateWe review the property, cost, and your tax position to estimate the reclassification and the benefit, at no cost, before you commit.
Records gatheringClosing statements, purchase price allocation, appraisal, cost detail, and construction drawings or plans where available.
Site inspectionAn engineer documents the building’s components, finishes, systems, and site improvements first-hand.
Engineering analysis & allocationComponents are classified into 5-, 7-, 15-, and 39- or 27.5-year property, and costs are allocated using recognized engineering methods.
Report & schedulesA detailed report with asset-by-asset schedules and supporting documentation, plus Form 3115 and §481(a) support for look-back studies.
Delivery & audit supportThe package goes to your CPA to put on the return, and we stand behind the study if it’s ever examined.

What You Receive

A report your CPA can file from.

A detailed narrative describing the property and methodology
Asset-by-asset schedules with recovery periods and cost allocations
Photographic and engineering support for the classifications
Depreciation schedules ready for your tax preparer
Form 3115 and §481(a) support for look-back studies

Common Questions

The process, plainly.

How long does a study take?

Most studies are completed in a few weeks once records are gathered and the site is reviewed. Look-backs and construction studies can vary with complexity.

Do you need to visit the property?

An engineering-based study generally includes a site inspection, it’s part of what makes the result defensible. Remote approaches are used only where appropriate and documented.

Will my CPA be able to use the report?

Yes. The report is built to hand straight to your tax preparer, with schedules and support formatted for the return. We coordinate with them directly if that’s easier.

What if the study is examined?

We stand behind the studies we deliver and support them through examination, which is exactly why the engineering basis and documentation matter.

This page is general information, not tax or legal advice. Depreciation results depend on the property, the taxpayer’s facts, and applicable law, and are determined through the cost segregation study in coordination with your tax advisor. Novaric does not guarantee deduction amounts or any tax outcome.

An engineering-based study,built to hold up.