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Frequently Asked Questions
Find answers to common questions about cost segregation, property eligibility, study options, timelines, and what to expect when working with Sift.
A cost segregation study analyzes a property to identify building components that may qualify for shorter depreciation periods under applicable tax rules.By identifying and documenting eligible components, the study can accelerate certain depreciation deductions, potentially reducing current tax liability and improving cash flow.The actual benefit depends on the property and the owner's individual tax circumstances.
With DIY cost segregation, you use an online application to produce the report yourself. You enter specifications like property type, square footage, and flooring type, and can download the report without any involvement from a professional.Advantages:Fast- the report is done as soon as you collect and enter the information.Cheap- usually not more than a few hundred dollars.Disadvantages:Non-compliant- the IRS explicitly requires cost segregation to be done by qualified individuals.Lower benefit- lacking proper justification, the allocations must be more conservative.More work- you're collecting and entering the data yourself.DIY can be a great fit for properties where the stakes are low, like if the purchase price was less than $80,000, or if the owner isn't paying very much tax. But for most property owners considering cost segregation, a DIY study is leaving money on the table.
Income-producing properties, including rental homes, multifamily buildings, offices, retail spaces, warehouses and other commercial properties, may be candidates for cost segregation.Whether a study is worthwhile depends on the property's details, its depreciable basis and your individual tax circumstances.Tell us about your property through our "Request a Proposal" form. We'll review the information and help determine whether a study makes financial sense.
Our standard turnaround is 15-20 business days, see Our Services page for more details.Need your study sooner? Let us know; we can usually accommodate tighter deadlines if needed.
Sift offers three study options, with pricing based on the property's size, complexity, and required level of analysis.Our study options are priced as follows:Essential | $1,900High Detail | Starting at $3,900Comprehensive | Starting at $10,000We begin with a benefit analysis to help determine whether a study makes financial sense for your property and which option best suits your needs.
Final pricing is confirmed once we've reviewed your property and established the scope of work.
For qualifying properties, the potential tax benefits can be significant — from single-family rental properties to large commercial buildings.Rather than depreciating most building costs over 27.5 or 39 years, cost segregation identifies eligible components that can be depreciated over shorter periods. Some components may also qualify for bonus depreciation, allowing larger deductions much sooner, potentially in the first eligible tax year.The result? Potentially substantial upfront tax savings and improved cash flow, rather than waiting decades to realize those deductions.That's why Sift starts with a property-specific benefit analysis: to estimate your potential savings and help determine whether the expected benefit justifies the cost of a study.
To request a proposal, simply tell us a little about your property, including its type, location, approximate value, and when it was acquired or placed in service.If you decide to proceed with a study, we’ll request the records you have available. These may include a closing or settlement statement, appraisal, depreciation schedule, floor plans, construction budgets, purchase invoices, or relevant lease information.For studies requiring an on-site inspection, we’ll also ask for a contact who can coordinate access to the property.You don’t need to have every document ready. Send us what you have, and we’ll let you know what additional information would be helpful.
Yes. You may still benefit from a cost segregation study even if you acquired your property several years ago and have already started depreciating it.In qualifying circumstances, a catch-up depreciation adjustment may allow you to claim eligible deductions that could have been taken in earlier years.Acquired your property through a 1031 exchange? That doesn't automatically prevent you from pursuing a cost segregation study. Sift can evaluate properties with prior exchange histories, although the property's tax basis and depreciation treatment may require additional consideration.Our benefit analysis helps identify the potential opportunity, and we provide study documentation for your tax professional to determine the appropriate filing treatment.nefit analysis and provide the study documentation for your tax professional to determine the appropriate filing treatment.
No one can guarantee whether a tax return will be selected for an IRS audit. What matters if your deductions are examined is having a well-supported study that explains and justifies its findings.At Sift, we focus on maximizing eligible depreciation benefits while supporting our asset classifications and valuations with detailed documentation and relevant tax authority. We deliver a study that is both financially effective and defensible.We provide audit-defense support as standard with all our studies, so you're not left to address questions about the study alone.
Yes. Sift prepares cost segregation reports designed to give your CPA or tax professional the information needed to incorporate the study's findings into your tax return.Depending on the study's scope, the report documents identified assets, their depreciation classifications and valuations, along with the methodology and tax-law support behind the findings.We're also available to clarify study-related questions. Your tax professional determines how the results apply to your individual circumstances and handles the appropriate tax filings.
Once you submit your property details, Sift reviews the information and contacts you if anything further is needed.We then prepare a property-specific analysis and proposal outlining the estimated tax benefits of cost segregation. This includes a comparison of projected depreciation with and without a study, the potential financial benefit over time, and an evaluation of the expected return relative to the study fee.You'll be able to review the projected benefits, pricing, and proposed scope of work before deciding whether to proceed. The figures are estimates based on the available information and assumptions, rather than guaranteed tax outcomes.Our goal is simple: to help you understand what you stand to gain and whether a cost segregation study makes financial sense for your property.
Yes, we give significant discounts for multiple properties.
Still have questions?
We're here to help.
Contact our team with any remaining questions, or request a proposal to explore your property's potential.
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