LOOK-BACK STUDIES AND FORM 3115 A study can also be completed after the original acquisition year. In many cases, an owner may claim missed depreciation through an accounting method change and a Section 481(a) adjustment rather than amending multiple prior returns. A Cost Segregation Form 3115 guide can help owners prepare for a discussion with their CPA. CHOOSING A DEFENSIBLE STUDY A reliable apartment building cost segregation study should: • Explain the methodology • Identify the preparer • Reconcile costs to source documents • Provide asset-level classifications. Purchase agreements, settlement statements, appraisals, construction records, depreciation schedules, and renovation invoices can strengthen the analysis. The lowest-priced report is not necessarily the best choice if it lacks engineering support or a clear audit trail.
THE LOWEST-PRICED REPORT IS NOT NECESSARILY THE BEST CHOICE IF IT LACKS ENGINEERING SUPPORT OR A CLEAR AUDIT TRAIL.
FINAL TAKEAWAY
Cost segregation for multifamily apartment buildings can improve the timing of rental property depreciation and free cash for repairs, reserves, debt reduction, or new investments. The strongest decision combines a defensible engineering analysis with tax projections that account for passive losses, bonus depreciation, state rules, and the planned sale date.
For a property-specific estimate, Cost Segregation Guys can prepare a free proposal and explain the study options available for a multifamily asset. Owners should share the proposal with their CPA before making tax elections or filing changes.
NATHAN RESNICK Partner Cost Segregation Guys CostSegregationGuys.com n@costsegregationguys.com Connect on LinkedIn
Nathan Resnick is an active real estate investor and partner at Cost Segregation Guys, a firm trusted by over 10,000 nationwide real estate investors. With over $1B in depreciation realized and lifetime audit support, get a free depreciation analysis for your property today at CostSegregationGuys.com.
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