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CSS

COST SEGREGATION STUDY

Cost Segregation Study

Cost Segregation Study St. Louis, MO

Accelerate depreciation, reduce tax liability, and improve cash flow on your commercial and rental real estate with a professionally prepared Cost Segregation Study (CSS) performed by licensed Professional Engineers.

Criterium-Hardy Engineers provides engineering-based, IRS-compliant cost segregation analyses for property owners throughout Missouri. Our studies help investors maximize depreciation, increase near-term cash flow, and improve the overall ROI of real estate investments.

  • Engineering-Based Cost Segregation Study

  • Performed by Licensed Engineers

  • IRS-Compliant Engineering Documentation

  • Commercial Properties Only

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What Is a Cost Segregation Study?

A Cost Segregation Study (CSS) is a detailed engineering and tax analysis that identifies and reclassifies specific components of a building into shorter depreciation categories. Instead of depreciating an entire property over 27.5 years (residential rental) or 39 years (commercial), cost segregation allows certain parts of the building—such as flooring, lighting, electrical systems, cabinetry, parking lots, and landscaping—to be depreciated over 5, 7, or 15 years.

This reclassification accelerates depreciation deductions, reducing taxable income now instead of spreading the deduction over decades.

Who Should Consider a Cost Segregation Study?

Cost Segregation is ideal for:

  • Owners of commercial real estate (office, retail, industrial, hospitality, warehouse, self-storage).
  • Owners of residential rental property, including multifamily and apartment buildings.
  • Investors who recently purchased, built, renovated, or expanded a property.
  • Property owners planning major capital improvements or tenant build-outs.
  • Real estate portfolios seeking increased early-year cash flow.
  • Properties with a building basis typically above $500,000, where accelerated depreciation benefits outweigh the cost of a study.

Typical property types that benefit most from cost segregation include:

  • Office buildings
  • Medical office and healthcare facilities
  • Retail stores and shopping centers
  • Restaurants
  • Hotels and hospitality properties
  • Industrial and manufacturing buildings
  • Warehouses and distribution centers
  • Multifamily, senior living, and apartment complexes

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Why Cost Segregation Is Important

A professionally performed Cost Segregation Study delivers several key benefits:

1. Significant Tax Savings Through Accelerated Depreciation

Reclassification of qualifying assets into shorter depreciation lives (5, 7, or 15 years) front-loads deductions, producing substantial tax savings.

2. Increased Cash Flow

Reduced tax liability in the early years frees more cash for reinvestment or operations.

3. Improved Return on Investment (ROI)

Accelerated depreciation enhances real estate profitability and strengthens overall investment performance.

4. Catch-Up Depreciation Opportunities

If the property was placed in service in a previous year, a cost segregation study may allow “catch-up” depreciation without amending prior returns.

5. IRS-Compliant Engineering Analysis

Our engineering-based studies provide thorough documentation and asset classifications that meet IRS expectations and support audit defense.

How a Cost Segregation Study Works

Our engineering team follows a structured and compliant process:

1. Feasibility Review

We estimate potential tax savings and determine whether a study is financially beneficial for your property.

2. Data Collection

We review construction documents, invoices, architectural drawings, cost schedules, and site details.

3. Site Visit and Engineering Analysis

When necessary, our engineers inspect the property to identify and quantify building components eligible for accelerated depreciation.

4. Cost Allocation and Reclassification

We reallocate costs to appropriate asset classes, distinguishing structural components from personal property and land improvements.

5. Final Report and Depreciation Schedules

You receive a detailed, IRS-compliant report that includes all classifications and depreciation schedules required for tax filing.

6. CPA Coordination and Support

We work directly with your tax professional to ensure smooth implementation.

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When to Get a Cost Segregation Study

A study is most beneficial when:

  • You purchase or construct a property.
  • You complete a renovation, upgrade, or tenant improvement.
  • You need to increase cash flow for reinvestment.
  • You want to take advantage of available bonus depreciation opportunities.

You own an existing property and want to capture unclaimed depreciation.

Cost segregation can be performed in the current tax year or on properties placed into service during previous years.

Request a Cost Segregation Study

A Cost Segregation Study can significantly improve the financial performance of your commercial or rental property.


 Contact us to schedule a feasibility review or request a proposal today.

Request A Cost Segregation Study
A Cost Segregation Study is an engineering-based analysis that identifies components of your building that can be depreciated over 5, 7, or 15 years instead of the standard 27.5 or 39-year schedules, creating significant early tax deductions and improved cash flow.
Property owners with commercial buildings, residential rental units, multifamily properties, newly constructed buildings, renovated spaces, or acquisitions typically above $500,000 benefit the most. It is especially valuable for investors looking to increase early-year cash flow.
Yes. Even if the property has been in service for several years, you can capture missed depreciation through a “catch-up” adjustment (without amending previous returns), resulting in a significant deduction in the current year.
Absolutely. The IRS recognizes cost segregation as a valid tax strategy when performed by qualified professionals. Our engineering-based reports follow IRS guidelines and include documentation suitable for audit defense.
Most studies take 2–6 weeks depending on project size, document availability, and site access. We begin with a feasibility review to confirm the potential tax benefit before starting.
No. The IRS does not consider cost segregation a red flag. In fact, engineering-driven studies like ours reduce audit risk because they properly document asset classification and methodology.
The best time is the year the property is placed in service—after purchase, construction, or renovation. However, studies can be performed at any time, including retroactively, to unlock missed depreciation.