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Frequently Asked Questions

Cost Segregation FAQs

The CRS team holds decades of experience in the CRE and other related industries including engineering, architecture, tax, accounting, finance, construction and cost estimating. They are also members of and hold advanced accreditations in the American Society of Cost Segregation Professionals (ASCSP), the industry’s watchdog organization promoting oversight, education and the highest level of ethical and technical principles in the industry.

Managing Director Rob Rahner holds the Certified Cost Segregation Professional (CCSP) designation, the industry’s highest credential. This certification requires a minimum of seven years of experience, 7,000 hours of direct cost segregation project work, and successful completion of a rigorous exam covering technical, engineering, legal, tax, ethical, and other industry-related topics.

Our expertise and commitment to excellence in the field ensures our clients receive the most comprehensive, ethical and IRS-defendable reports. For more information on individual qualifications, see Our Team page.

The potential savings vary depending on the property type and value. Contact us for a free benefits analysis.

The ideal time is when the building is first constructed or acquired, as this allows you to maximize the tax benefits from the beginning. However, a retroactive study can be done up to 15 years later without amending tax returns. It’s almost never too late to improve your cash flow.
Absolutely. A cost segregation study can be performed on new construction, an acquisition, or a property you’ve owned for years.

Assets vary by property type and require a detailed assessment to determine if they qualify for a reduced depreciation schedule. Some examples include:

5/7 Year Depreciation

  •  Air Filtration Systems
  • Appliances
  • Cabinets and Shelving
  • Carpeting
  • Decorative Wall Covering
  • Decorative Millwork and Molding
  • Electrical Circuits Dedicated to Equipment
  • Decorative Lighting
  • Emergency Power Generators
  • Finish Carpentry
  • Fire Extinguishers
  • HVAC Components (Specialized Equipment)
  • Loading Dock Equipment
  • Lockers
  • Laminate/Luxury Vinyl Plank Flooring
  • Movable Wall Partitions
  • Plumbing Directly Connected to Appliances or Equipment
  • Signage
  • Sound Systems
  • Window Treatments
  • Wood Flooring

15-Year Property (Land Improvements)

  • Brick Paver Walks
  • Concrete Paving
  • Curbing
  • Landscaping
  • Outdoor Fencing
  • Parking Lots
  • Retaining Walls
  • Sidewalks
  • Site Lighting
  • Underground Storm Drainage

Our engineers will carefully assess your property to determine which assets qualify for each category.

A cost segregation study, on average, takes 4 to 6 weeks to complete and requires only a minimal time investment by you and your accountant. If you are under shorter time constraints, CRS can work with you to deliver a study to meet your deadline.

CRS delivers a signed, certified, IRS-compliant report that includes asset classifications and descriptions, references to related tax citations and court rulings, and detailed asset-segregation spreadsheets.

CRS uses extremely detailed, IRS-preferred analysis methods that help ensure our cost segregation studies will hold up to an audit. In the rare instance that this occurs, we stand by our findings and are fully prepared to support them. We have a proven track record of successfully defending our studies with the IRS.

A DIY cost segregation report can lead to significant financial and legal risks due to the complexity of tax laws and engineering-based asset classification. Here’s why:

  • Missed Tax Benefits – Without deep expertise, a DIY report may overlook key reclassification opportunities, leaving money on the table in potential tax savings.
  • Lack of Expertise & Accuracy – Cost segregation requires specialized engineering, tax, and accounting knowledge to properly identify and classify assets. Misclassification can lead to IRS audits, penalties, or lost tax savings.
  • IRS Scrutiny & Compliance Risks – The IRS requires cost segregation studies to be conducted using defensible methodologies. A poorly prepared DIY report may not withstand an audit, resulting in back taxes, interest, and penalties.
  • Time-Consuming & Costly Errors – Conducting a cost segregation study demands detailed property analysis, cost breakdowns, and tax calculations. Mistakes can be costly, often outweighing the cost of hiring a professional.

Hiring qualified cost segregation professionals like those at CRS ensures accuracy, maximized tax savings, and audit protection, making it a smart financial decision over attempting a DIY approach.

Most commercial or residential rental buildings with a cost basis over $750,000 (and in some cases less) will benefit from a cost segregation study. However, there are some instances where it may not be cost-effective to perform one:

  • There are other significant losses to claim for the current tax year
  • The property will be sold within the next few years
  • The owner is a nonprofit, government entity or other tax-exempt organization
  • The property is more than 15 years old, or near the end of its depreciation schedule
  • The owner is subject to alternate minimum tax

At no cost to you, CRS can advise you or work with your accountant to determine if a cost segregation study is appropriate for your property. Our free benefits analysis provides a detailed estimate of the tax savings to be gained, enabling you to make an informed decision if and when the study would make sense to perform.

Energy Tax Services FAQs

Both incentives aim to promote energy efficiency, but they apply to different building types (commercial vs. residential) and have distinct eligibility criteria and benefits. Our team can help you determine which incentive is best suited for your project.

Capital costs associated with these commercial building systems can potentially qualify for 179D:

  • Lighting
  • Heating, Ventilation, and Air Conditioning (HVAC)
  • Building envelope (including roof, walls, windows, and doors)

Owners and tenants of many types of commercial buildings can benefit from energy-efficient upgrades and potentially qualify for tax incentives. Some common examples include:

  • Automotive Dealerships
  • Distribution Centers
  • Hospitals
  • Hotels/Motels
  • Industrial Facilities
  • Manufacturing Facilities
  • Office Buildings
  • Retail Stores
  • Warehouses
  • Private Schools

Additionally, architects, engineers, designers, and other contractors who have implemented energy-efficient designs for government-owned and other tax-exempt buildings can now benefit from the deduction. Building types include:

  • Public schools
  • Hospitals
  • Churches
  • Airports
  • Public colleges and universities
  • Libraries
  • Non-profits / charities

The 45L tax credit is available to owners or developers of energy-efficient residential dwellings. Building types include:

  • Single-family homes
  • Multi-family buildings (apartments, condominiums, townhouses)
  • Assisted living facilities
  • Student housing
To claim 179D and 45L tax benefits, a certification report must be prepared by a qualified third party such as CRS. It must adhere to the guidelines established by several federal government and industry organizations and programs who determine energy-efficient criteria. The report includes the energy-efficiency improvements made to the building, the energy savings achieved, and the methodology used to calculate the energy savings.

Yes, both the 179D deduction and the 45L credit can apply to new and existing buildings that meet specific energy efficiency criteria.

To apply retroactively, you typically must file an amended tax return. 179D claims can be filed up to three years from the original filing date. 45L claims are generally available for projects completed within the last three years.

Complex eligibility requirements for the 179D deduction and the 45L credit are set by a combination of federal government and industry organizations and programs. These include the U.S. Department of Energy, Environmental Protection Agency, International Energy Conservation Code (IECC), the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) and the IRS’ Internal Revenue Code as updated by the Inflation Reduction Act (IRA) of 2022.

CRS ensures compliance with detailed 179D and 45L requirements while maximizing your tax benefits. Our experts specialize in ASHRAE and IECC standards as well as newer standards set by the IRA. We streamline all energy modeling, testing, and documentation needed to complete your certification report, thus reducing administrative burden and IRS risk. We are committed to staying up to date with evolving standards and regulatory changes, ensuring that projects consistently meet the latest requirements.

Tangible Asset Appraisals FAQs

Our professionals include accredited senior appraisers from the American Society of Appraisers, holding specialty designations in both Machinery and Equipment (M&E) and Cost Surveys. They also possess other advanced designations like Chartered Financial Analyst (CFA) and Certified Cost Segregation Professional (CCSP). Our appraisals are highly detailed, independent, and strictly adhere to the Uniform Standards of Professional Appraisal Practice (USPAP).

We appraise a wide range of physical assets, including machinery, buildings, and land.

See our Case Studies page for some specific examples of recent tangible asset appraisal projects.

We provide services for a wide range of industries including real estate, retail, manufacturing, health care, hospitality, telecommunications, entertainment, energy, consumer business, transportation, food service, and technology.

An appraisal is often necessary for various situations, such as:

  • Buying or selling a business or asset
  • Tax compliance and planning (e.g., property taxes, depreciation)
  • Financial reporting and auditing
  • Mergers, acquisitions, and divestitures
  • Asset-based lending and financing
  • And more

After gathering information about the scope of and goals for the appraisal, CRS determines the appropriate premise of value and value definitions we use to complete the project. These will depend on the asset’s current and future use, the owner’s intentions, and market conditions.

  • Premise of value refers to the assumed conditions under which an asset is valued and establishes the circumstances affecting its worth. Examples include continued use, in exchange, orderly or forced liquidation.
  • Value definitions specify the type of value being measured based on legal, financial, or market considerations. These can include fair market value, orderly and forced liquidation value, and salvage value.

Using the correct premise and definitions for the valuation ensures our clients can achieve the best possible financial and strategic outcomes based on their specific situation.

Fixed Asset Reviews FAQs

Fixed assets are tangible pieces of property that a company owns and uses in its operations to generate income. Examples include buildings, computer equipment, furniture, land, machinery, and vehicles.
Fixed asset records are crucial for internal reporting, compliance, and attracting investors or securing loans. As your company grows and changes, tracking fixed asset value can become complex. Incorrect depreciation schedules can impact company valuation, lead to inaccurate tax filings, and increase costs.

Our fixed asset specialists ensure your asset listings are accurate and complete. Beyond organization, our reviews can uncover tax savings by:

  • Reclassifying asset costs for faster depreciation
  • Identifying bonus depreciation opportunities
  • Analyzing energy-efficient building systems for tax benefits
  • Managing and reconciling fixed asset databases
  • Identifying and removing “ghost assets”
  • Ensuring compliance with Tangible Property Regulations
  • Reviewing depreciation schedules for accuracy
  • Identifying demolished structural components

These efforts can result in more tax deductions, income tax deferrals, property and sales tax savings, and better utilization of tax incentives/credits – all leading to increased cash flow.

Both can uncover tax savings, but they focus on different aspects of your assets. We’ll help you determine the best approach.

© 2025 Cost Recovery Solutions LLC

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