Working With Your CPA
A cost segregation study classifies and prices components. Your CPA or tax adviser decides how to use it on your return. Bring the CPA in before the study starts so basis, dates, elections, and any prior filings are settled. Educational information, not tax advice.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Your CPA decides elections, filing method, and whether the result suits your tax position.
- The study supplies the classification, cost support, and documentation.
- Bring your CPA in before the study starts.
- Bonus rates depend on acquisition date as well as placed-in-service date.
- State depreciation may not follow the federal timing.
A study answers what each component is and what it cost. It does not decide how much depreciation you should claim this year, whether to elect out of bonus depreciation, how state law treats the result, or whether a Form 3115 is needed. Those are tax return decisions for your CPA or tax adviser.
Early coordination helps. Your CPA can confirm the placed-in-service date, the depreciable basis, any purchase price allocation already reported, and whether the property has been on returns already.
Educational information, not tax advice. Nothing in a CostSeg SI article files a return, makes an election, or applies the result to your facts.
The study file should arrive in a form the CPA can use: class, cost, method, convention, and placed-in-service date, plus the reconciliation to basis. A narrative without a postable schedule, or a schedule that does not add up, shifts work back onto the return preparer.
On a later sale, the same classes affect recapture. Planning the entry and the exit with the same adviser is the point of involving the CPA early.
If the CPA is brought in only after the report is bound, the usual problems are already baked in: a land value that does not match the return, a placed-in-service month the prior year already used, or a purchase-agreement allocation the study ignored. Those are cheaper to fix as questions than as a rewritten report.
Questions your CPA may consider
Can you use the deductions this year, or will passive activity or other limits defer them? Is bonus depreciation available at 100%, or does a pre-January 20, 2025 binding contract apply the phase-down rate? Should any class be elected out of bonus? Does your state conform? Is a look-back better done through Form 3115?
As of October 16, 2026, 100% additional first-year depreciation applies to qualified property acquired after January 19, 2025. For the first taxable year ending after that date, a reduced 40% rate (60% for certain long-production-period property and aircraft) can be elected instead.
Section 179 is a separate election with annual limits. For tax years beginning in 2026, Rev. Proc. 2025-32 sets the dollar limit at $2,560,000 and the phase-out threshold at $4,090,000. Land improvements such as paved parking and fences do not qualify as §179 real property.
What to send your CPA
The final report, the asset schedule in a format their software accepts, the reconciliation to basis, and any assumptions that affect the return, such as land value or placed-in-service date.
If prior returns already depreciated the property, send those depreciation schedules too. The §481(a) computation needs the amounts actually claimed. Also send the partnership or S corporation ownership details if the property is held in a pass-through, because §179 limits and some elections apply at more than one level.
Purchase agreements with allocation exhibits belong in the same package. A written allocation can limit what the study may reassign.
On sale
Depreciation on §1245 property is generally recaptured as ordinary income when the property is sold. Your CPA can model that effect against your expected holding period.
Building depreciation under MACRS is straight line, so §1250 additional depreciation on the structure is usually none. The recapture mix after a study is therefore heavier in the personal-property classes.
This article does not state a rate for unrecaptured §1250 gain. That rate was not verified in the October 2026 research session.
Federal and state returns
California does not conform to §168(k), the enhanced §179 election, or §168(n). A federal first-year difference can shrink on Form FTB 3885. Other states are not named here without that state’s official source.
If the CPA prepares both returns, the study should make the federal classes clear enough that a nonconforming state schedule can be built without re-estimating the building. The study does not compute the state difference. It only needs to keep the federal classes and costs transparent.
Roles that stay separate
The study preparer classifies and prices. The CPA owns elections, method-change filing, and the signed return. Mixing those roles in marketing copy is how “we will file your 3115” claims get ahead of the facts. A preparer can supply a draft asset listing. Only the return signer decides what is claimed.
CostSeg SI’s proposed Super Intelligence workflow is an explanatory product description. It does not replace CPA judgment and is not described here as an operational filing service. Extraction, published-cost estimation, QA, and engineer certification are not claimed as live steps on this page.
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