Did you know?
High land value
can impact your total deduction.
Bola Akinsanya · Founder, Unlevered · October 28, 2026
We love beachfront and lakefront homes. Unfortunately, the view is most of the value, leaving less basis for you to generate tax deductions.
Land never depreciates. Your purchase price minus land is your basis, and your basis is what a cost segregation study breaks into parts and deducts. So before a study even starts, the land number sets the ceiling.
The IRS asks for land at fair market value, with four methods to support it. Each one can land on a different number for the same house.
Same house, same price, four land values
Move the price. Tap a method to see what it leaves you to deduct.
Lot sales vs. the county split: +$80K in estimated year-one deduction.
We source every defensible method.
The four methods
The IRS does not rank these. Its own guidance names the county split as the fallback when you are not sure of fair market value. Courts have accepted county ratios (Nielsen, T.C. Summary Opinion 2017-31) and rejected them when they did not match reality (Meiers). The 80/20 rule of thumb is not one of them.
Why land moves
Fire risk, flood risk and rising insurance costs move land prices fast. Recent lot sales show it. County values lag, sometimes by years. The same house can carry a very different land number depending on which record you use and when it was made.
How we do it
Our approach sources each method for your property and uses the one the evidence supports best. We do not pick a method because it yields more, and we never attest the land value ourselves. We anchor your property’s basis on evidence and facts.
For a real example of how land changes the math, see why land value changes the math.
Partner with a modern cost seg firm: unlevered.io/hello.
Illustrative example with round numbers, not a real property. Purchase only, 2026 rules (100% bonus), Unlevered estimate model. Talk to your CPA.