What is a cost segregation study and how does it work?
A cost segregation study is an engineering-based tax analysis that reclassifies components of your real property such as flooring, lighting, landscaping, and specialty equipment into shorter depreciation categories of 5, 7, or 15 years, instead of the standard 27.5 or 39 years. This accelerates your depreciation deductions, significantly reducing your taxable income in the early years of ownership and freeing up cash for reinvestment.
Who qualifies for a cost segregation study in Oregon?
Any Oregon property owner with an income-producing property that has a depreciable building basis of $300,000 or more can benefit. This includes single-family rentals, multi-family properties, commercial buildings, short-term rentals, self-storage facilities, industrial properties, and more. Properties purchased, constructed, or renovated in the last 15 years may also qualify for a lookback study to recover missed depreciation.
How much can I save with a cost segregation study?
Seneca's average client achieves a first-year tax deduction of $171,243. Savings vary by property size: entry-level properties ($300K–$1M) typically see $30,000–$75,000 in first-year savings, while larger properties ($3M–$10M) can save $200,000–$400,000. ROI ratios often exceed 10:1 meaning for every dollar spent on the study, you receive $10–$25 back in tax savings.
How long does a cost segregation study take?
Seneca completes most studies within 2–4 weeks significantly faster than the industry standard of 4–8 weeks. Virtual property tours further accelerate the timeline to 2–3 weeks. For clients with urgent tax deadlines, rush service is available and can deliver a completed study in as little as one week, subject to a premium fee based on the property's complexity.
Is a cost segregation study IRS-compliant and audit-safe?
Yes. Seneca's studies are built on a strict engineering-based methodology that adheres to all IRS guidelines, giving them a low-risk audit profile. Additionally, every study includes Seneca AuditDefense at no additional charge covering you for the full duration of your property ownership. If an audit occurs and the study has a material issue, Seneca can refund the cost of your study.
Can I do a cost segregation study on a property I bought years ago?
Yes, this is called a lookback cost segregation study, and it allows you to claim missed depreciation on properties placed in service up to 15 years ago without amending prior returns. Using IRS Form 3115, all accumulated missed deductions are applied in a single tax year, creating a substantial one-time benefit. The process and cost are similar to a standard current-year study.
Do I need to do an in-person property inspection?
No. Seneca offers convenient virtual property tours conducted via video call, typically lasting 30–45 minutes. During the virtual tour, our engineers conduct real-time component identification and digital documentation. Virtual inspections reduce overall study costs by eliminating travel expenses and deliver faster turnaround times of 2–3 weeks versus 4–6 weeks for on-site visits.
How does Seneca coordinate with my CPA or tax advisor?
After your study is complete, Seneca's team works directly with your CPA or tax professional to ensure seamless implementation of the findings. This includes reviewing the report together, integrating the fixed asset schedule into your current tax return, and providing Form 3115 support for lookback studies. This CPA coordination and implementation support is included at no additional charge with every study.
Has Seneca completed cost segregation studies in Oregon?
Yes. Seneca studied the Waverly Townhomes, a 35-unit ground-up townhome community in Albany, Oregon, with $5,891,061 in construction costs. The study identified $1,403,836 of 5- and 15-year property, about 24% of the cost. With the 80% bonus depreciation rate in effect when the property was placed in service, that produced a first-year deduction of $1,250,371 and more than $415,000 in first-year federal tax savings at a 37% rate. A comparable project acquired, or whose construction began, after January 19, 2025 qualifies for 100% bonus instead.