What a cost segregation report looks like — with real examples.

What a cost segregation report example includes

A study reads in this order. Each part is engineered from the property's own documents, not filled in from a template.

1. 01

   Engineered basis derivation

   The study starts from the purchase price, carves out non-depreciable land at the documented allocation, and establishes the depreciable basis. It is derived from source documents, not estimated from a rule of thumb.

2. 02

   Room-by-room component reclassification

   Each building component is identified and moved to its correct 5-, 7-, or 15-year life, allocated to the room it belongs to, with a citation to the underlying tax authority behind every classification.

3. 03

   Full depreciation schedule

   A complete MACRS schedule across every recovery class, with bonus depreciation applied at the correct §168(k) rate for the property's placed-in-service and acquisition dates.

4. 04

   §481(a) catch-up, when it applies

   For a lookback on an already-placed-in-service property, the report books the previously missed depreciation as a single current-year §481(a) adjustment on Form 3115 — no amended returns.

5. 05

   The Workpaper

   An internal calculation trace that reproduces the study line by line, so an examiner can follow every dollar back to the document it came from.

See real examples

Each card is a published study. The year-one figure is read live from that study's engine run — open one to read it page by page.

Short-term rental

The Salt House Marion

Marion, MA, 02738

$348K
year-one deduction

Short-term rental

The Serrano Avenue

Los Angeles, CA, 90027

$197K
year-one deduction

Short-term rental

Timber Ridge at Sea Ranch

The Sea Ranch, CA, 95497

$512K
year-one deduction

Short-term rental

The Kenwood Twin Cabins

Kenwood, CA, 95452

$509K
year-one deduction

Lookback

The Willow Bend Condo

Austin, TX, 78704

$220K
year-one deduction

How these studies maximize deductions

The lever is time value: the sooner basis is deducted, the more it is worth. A study pulls every dollar the facts support forward.

• Short-life reclassification. Components that qualify as §1245 personal property or §1250 land improvements move from the 27.5-year line into 5-, 7-, and 15-year lives — carpet, cabinetry, specialty electrical, appliances, fencing, landscaping, site work.
• Bonus depreciation. The reclassified short-life dollars take bonus depreciation in year one at the correct §168(k) rate for the property's dates, so a large share of the deduction lands immediately.
• §263A pro-rata soft costs. Indirect costs — permits, project management, general conditions — are spread across the asset classes rather than parked at 27.5 years, which keeps short-life basis short-life.
• Land carved out correctly. Non-depreciable land is separated at the documented allocation, so no basis is wasted and none is over-claimed.

None of this is a shortcut. It is the depreciation the tax code already provides for these components, taken on the schedule the law allows.

Why they're defensible and audit-ready

Defensibility comes from method, not aggression. Each study is built to the IRS Cost Segregation Audit Techniques Guide.

• Engineered basis, derived from source documents — never a percentage estimate.
• Every component classified with a citation to the underlying tax authority.
• Fully reproducible: the same inputs always produce the same study.
• The Workpaper, an audit-defense record that traces each dollar back to its document.
• Unlevered prepares and signs the engineering study; the owner's CPA remains the sole tax return preparer.

Unlevered's founder made this case in Accounting Today: the core calculation must be deterministic and reproducible, with AI kept to peripheral verification rather than the number itself.

Common questions

What does a cost segregation report look like?

A cost segregation report reclassifies a residential building's components out of the default 27.5- or 39-year line and into their correct 5-, 7-, and 15-year lives. A real one shows the engineered basis derivation, a room-by-room component breakdown with a citation behind each classification, the full depreciation schedule, the bonus depreciation applied under §168(k), and — for a lookback — the §481(a) catch-up filed on Form 3115. Every example on this page is true deterministic-engine output; only the address and owner identity are changed for privacy.

How do cost segregation studies maximize deductions?

They move as much basis as the facts support out of the slow 27.5-year building line and into short-life 5-, 7-, and 15-year property — carpet, cabinetry, specialty electrical, site improvements, landscaping — then apply bonus depreciation to those short-life dollars in the first year. Indirect soft costs are spread pro-rata across the asset classes under §263A rather than parked in the 27.5-year bucket, and non-depreciable land is carved out correctly so no basis is wasted. The result is a larger, defensible first-year deduction, not a bigger claim than the property supports.

Is a cost segregation study defensible in an audit?

It is when the basis is engineered rather than estimated and every component is classified to a specific tax authority. Each study here is built to the IRS Cost Segregation Audit Techniques Guide: the derivation is reproducible from the same inputs, each reclassification carries its citation, and the Workpaper traces every dollar back to a source document. Unlevered prepares and signs the engineering study; the property owner's CPA reviews it and remains the sole tax return preparer.

What makes a cost segregation study audit-ready?

Audit-ready means an examiner can follow the numbers without asking for anything the file can't produce. These studies ship with the engineered basis walk, the room-by-room component reclassification and its citations, the full depreciation schedule, and the Workpaper, the audit-defense record that reproduces the calculation line by line. Nothing is a black-box estimate — the same inputs always produce the same study.

Further reading

The founder's writing on how the engine works and why cost segregation exists — plus her byline in Accounting Today.

• Cost Segregation Exists to Drive Economic Activity (It's Not a Loophole)People treat cost segregation like something you got away with. It is the opposite. It is a lever Congress built on purpose, and I have watched it work from inside the house.
• Why Unlevered's Data Mapping Engine Unlocks 5–20% More DeductionsWhy a deterministic engine beats a purchased Excel template. An estimator guesses the whole asset; we verify everything public first, then estimate only the small part that is left.
• What a top-down estimate missed: $120K+ in a gym and a saunaA client paid $3,000 for a cost segregation study, then asked us to reverse engineer it. Two movable buildings the top-down estimate buried in the 39-year shell belonged in the 5-year class. Here is the $120,425 story.
• Managing My Real Estate Investment Made Me $5K/hrTiming my second property to my exit, pricing my hours, and the simple math behind material participation. A $500,000 deduction earned across a hundred hours a year — the most valuable hour I had, so it went first.
• The ugliest house in Sea RanchHow an IPO, a DJ, and a $550K+ tax bill led me to build a cost segregation platform. The founder origin story, with the tax returns to back it up.
• How an audit-defensible cost segregation study worksThe full methodology: evidence-sealed 3D reconstruction, the deterministic engine, and the hash-sealed Workpaper.
• AI slop is flooding the cost segregation industryUnlevered's founder, Bola Akinsanya, writing in Accounting Today.