Frequently Asked Questions

Cost segregation is a tax method that allows real estate owners to accelerate depreciation by identifying parts of a property that can be written off faster than the standard 27.5-year residential schedule.

Instead of treating the entire building as one asset, cost segregation breaks it into components — such as flooring, appliances, wiring, cabinetry, and certain exterior improvements — that the tax rules allow to be depreciated over shorter time periods.

This approach is firmly grounded in U.S. tax law. Cost segregation is supported by:

• IRC §167 (Depreciation)
• IRC §168 (MACRS depreciation rules)
• Longstanding IRS guidance and court cases recognizing component-based depreciation

When done correctly, cost segregation does not create extra deductions. It simply changes when depreciation is taken, allowing more deductions earlier in the life of the property.

MACRS: (Modified Accelerated Cost Recovery System) is the IRS framework that determines how quickly different types of property can be depreciated.

Because accelerating depreciation can significantly improve after-tax cash flow, especially in the early years of ownership.
Many investors use cost segregation to:

• Reduce current-year taxable income
• Offset rental income or other passive income
• Free up cash to reinvest or improve properties

While total depreciation over the life of the property remains the same, taking more depreciation earlier can have a meaningful financial impact.

Cost segregation itself is not unusual and is widely accepted when properly supported.

Like any tax position, it must be:

• Based on reasonable assumptions
• Supported by defensible methodology
• Documented clearly

That's why QuickSeg partners with experienced tax professionals to provide professional judgment and audit support, giving clients confidence that their study can stand up to scrutiny.

Cost segregation is commonly used for:

• Single-family rental homes
• Small multifamily properties
• Larger apartment buildings
• Commercial real estate

QuickSeg is specifically designed for single-family and small residential rental properties, where traditional engineering-based studies are often too expensive or slow to be practical.

There is no fixed minimum required by the tax code.

Cost segregation tends to be more impactful when:

• The property has meaningful depreciable improvements
• The owner has taxable income to offset
• The property will be held for multiple years

QuickSeg produces a complete cost segregation study that can be used directly for tax filing — similar in purpose to a traditional engineering firm study, but delivered through a streamlined, automated platform.

The QuickSeg report is designed to be plug-and-play for tax professionals.

It includes:

• Asset class breakdowns
• MACRS lives and methods
• Annual depreciation schedules
• Bonus depreciation treatment where applicable

CPAs can:

• Record assets in fixed asset software
• File Form 4562 using the provided schedules
• Make elections consistent with the client’s tax strategy

The report is structured to align with how depreciation is commonly reported and reviewed.

Yes.

QuickSeg studies are supported by:

• Standardized cost methodologies
• Documented assumptions
• Consistent application of IRS depreciation rules

For additional peace of mind, QuickSeg partners with experienced tax professionals to provide audit support and professional judgment if questions arise.

Not necessarily.

QuickSeg is best suited for investors who:

• Own rental property
• Have taxable income to offset
• Want a complete cost segregation study without traditional cost and delays

If cost segregation isn’t appropriate for a property, that will generally become clear through the study results.

A Simple Example: Traditional Depreciation vs. Cost Segregation

Imagine this scenario:

An investor buys a rental property for $350,000.

After backing out the value of the land (which can’t be depreciated), $275,000 is depreciable.

Option 1: Traditional Depreciation (No Cost Segregation)

• The $275,000 is depreciated evenly over 27.5 years
• That’s about $10,000 per year
• Tax benefits are spread slowly over decades

Option 2: Cost Segregation

• A cost segregation study identifies parts of the property that qualify for faster depreciation
• In this example:
  • $120,000 is depreciated in Year 1
  • The remaining amount continues to depreciate over time
• The investor gets a much larger tax deduction up front

Why this matters

By taking more depreciation in Year 1, the investor may:

• Owe less in taxes that year
• Keep more cash on hand
• Reinvest in improvements, new properties, or other opportunities

Total depreciation over time doesn’t change — only when you get it does.

Quickseg combines established data sources, standardized cost models, and IRS depreciation rules to produce a complete cost segregation study.

At a high level, the platform:

1. Collects property and transaction data from reliable third-party sources
2. Estimates replacement cost using industry-standard cost databases
3. Applies cost segregation methodologies recognized under IRS rules
4. Generates depreciation schedules by asset class and by year

This allows QuickSeg to deliver consistent, transparent, and repeatable results without the delays of a manual engineering process.

QuickSeg relies on established industry and public data sources, including:

• Property records and transaction data
• Replacement cost databases used across the real estate and insurance industries
• Standard asset class definitions used in cost segregation

These inputs form the baseline for the study and ensure results are grounded in commonly accepted data.

Your role is essential.

While Quickseg pulls and models a large portion of the data automatically, you are responsible for validating and supplementing it. This includes:

• Confirming property details are accurate
• Identifying improvements or renovations
• Providing information about interior features and upgrades

For example, Quickseg may not know if you:

• Renovated the kitchen after purchase
• Installed upgraded flooring or fixtures
• Added appliances or other personal property

You review, confirm, and supplement this information to ensure the study reflects the actual property.

Why this matters: Interior improvements and personal property often qualify for faster depreciation, so accurate inputs can materially affect results.

RCNLD stands for Replacement Cost New Less Depreciation.

In simple terms:

• Replacement Cost New (RCN) estimates what it would cost to rebuild the property today
• Less Depreciation (LD) adjusts that cost based on the property’s age and condition

QuickSeg uses RCNLD to estimate how much of the purchase price is attributable to different building components, which is a foundational step in cost segregation.

This approach is widely used in:

• Cost segregation studies
• Property valuation
• Insurance replacement analysis

Why RCNLD is used: RCNLD helps allocate costs in a way that reflects real-world construction economics, not just accounting totals.

Bonus depreciation allows certain types of property to be written off immediately, instead of over several years.

Under current rules, many assets identified through cost segregation — such as 5-year and 15-year property — may qualify for 100% depreciation in the first year, depending on the tax year and elections made.

QuickSeg incorporates bonus depreciation rules directly into the study and depreciation schedules when applicable.

No. Bonus depreciation accelerates deductions rather than eliminating them.

You’re taking deductions sooner instead of spreading them evenly over time. Many investors prefer this because tax savings today can often be reinvested or used to improve cash flow.

QuickSeg is a software platform that produces full cost segregation studies for residential rental properties.

It automates the core components of a traditional study by:

• Using standardized cost data
• Applying IRS depreciation rules consistently
• Generating detailed depreciation schedules by year and by asset class

The result is a usable, defensible cost segregation report without the high cost and long turnaround times of traditional engineering firms.

Traditional studies:

• Are typically performed manually by engineering firms
• Can cost several thousand dollars
• Often take weeks to complete

QuickSeg:

• Is fully digital and automated
• Produces results quickly
• Is priced for single-family and small residential investors
• Generates a structured study and depreciation schedules suitable for tax filing

For many residential investors, QuickSeg delivers the same practical outcome — a complete cost segregation study — in a more accessible format.

No.

QuickSeg produces the cost segregation study and depreciation schedules, but your CPA:

• Prepares and files your tax return
• Advises on elections and filing strategy
• Applies the depreciation correctly to your overall tax situation

QuickSeg is designed to work with your CPA, not replace them.

No.

QuickSeg is a software platform that produces cost segregation studies. It does not provide legal or tax advice and does not prepare tax returns.

However, QuickSeg partners with experienced tax professionals to provide audit support and professional review, ensuring studies are grounded in accepted tax principles.

At a high level, QuickSeg:

1. Starts with the property purchase price
2. Removes land value, which cannot be depreciated
3. Allocates building costs across asset categories recognized under IRS rules
4. Applies the appropriate depreciation methods and lives

Once a study is completed, QuickSeg provides:

• Annual depreciation amounts by year
• Total depreciation over the life of the property
• Clear schedules your CPA can use directly