Many real estate investors aren’t aware that a structural engineering firm can help reduce their tax bill—but with a cost segregation study, that’s exactly what Pacific Skyline is doing for clients across Los Angeles and Orange Counties.
A cost segregation study is a strategic breakdown of a property’s components into shorter depreciation categories. Instead of treating the entire building as a 27.5- or 39-year asset, a study can reclassify items like flooring, appliances, land improvements, paving, and specialty lighting into 5-, 7-, or 15-year property. That means more depreciation is captured up front—and often leads to thousands or even hundreds of thousands of dollars in first-year tax deductions.
Why This Matters in 2025
For properties placed in service on or after January 15, 2025, 100% bonus depreciation is available. This allows qualifying components to be written off entirely in the first year, giving investors a significant early tax benefit.
Even for properties placed in service before that date, cost segregation still makes sense. While bonus depreciation might not apply to earlier years, reclassifying long-lived assets into shorter lives still creates substantial accelerated depreciation.
It's Not Too Late: Amend Past Returns
Many property owners don’t realize that if they missed out on bonus depreciation or didn’t do a cost segregation study in a prior year, they still have options. Pacific Skyline partners with IRS approved tax prep and planning company Solvent LLC to apply the study retroactively, either by amending a prior return or by filing IRS Form 3115 (Change in Accounting Method) without the need to amend. In other words—you don’t have to wait for your next property purchase to benefit. A study done now could unlock missed depreciation from years past and apply it to your current tax return.
Engineering-Backed Accuracy
Pacific Skyline approaches every cost segregation study from an engineer’s perspective. Because the IRS expects detailed, supportable documentation, the firm uses building plans, site visits, and construction cost data to produce accurate and defensible studies. The result is a report that CPAs can rely on, with classifications that comply with tax code standards.
This engineering-based approach gives property owners confidence that their depreciation strategy is both aggressive and defensible.
If you own residential or commercial rental property, especially anything placed in service recently—or even a few years ago—now is the time to look into a cost segregation study. With bonus depreciation fully restored for 2025 and options to claim missed depreciation from earlier years, the potential tax savings are real.
To learn more or schedule a consultation, reach out to the team at Pacific Skyline.
Many real estate investors aren’t aware that a structural engineering firm can help reduce their tax bill—but with a cost segregation study, that’s exactly what Pacific Skyline is doing for clients across Los Angeles and Orange Counties.
A cost segregation study is a strategic breakdown of a property’s components into shorter depreciation categories. Instead of treating the entire building as a 27.5- or 39-year asset, a study can reclassify items like flooring, appliances, land improvements, paving, and specialty lighting into 5-, 7-, or 15-year property. That means more depreciation is captured up front—and often leads to thousands or even hundreds of thousands of dollars in first-year tax deductions.
Why This Matters in 2025
For properties placed in service on or after January 15, 2025, 100% bonus depreciation is available. This allows qualifying components to be written off entirely in the first year, giving investors a significant early tax benefit.
Even for properties placed in service before that date, cost segregation still makes sense. While bonus depreciation might not apply to earlier years, reclassifying long-lived assets into shorter lives still creates substantial accelerated depreciation.
It's Not Too Late: Amend Past Returns
Many property owners don’t realize that if they missed out on bonus depreciation or didn’t do a cost segregation study in a prior year, they still have options. Pacific Skyline partners with IRS approved tax prep and planning company Solvent LLC to apply the study retroactively, either by amending a prior return or by filing IRS Form 3115 (Change in Accounting Method) without the need to amend. In other words—you don’t have to wait for your next property purchase to benefit. A study done now could unlock missed depreciation from years past and apply it to your current tax return.
Engineering-Backed Accuracy
Pacific Skyline approaches every cost segregation study from an engineer’s perspective. Because the IRS expects detailed, supportable documentation, the firm uses building plans, site visits, and construction cost data to produce accurate and defensible studies. The result is a report that CPAs can rely on, with classifications that comply with tax code standards.
This engineering-based approach gives property owners confidence that their depreciation strategy is both aggressive and defensible.
If you own residential or commercial rental property, especially anything placed in service recently—or even a few years ago—now is the time to look into a cost segregation study. With bonus depreciation fully restored for 2025 and options to claim missed depreciation from earlier years, the potential tax savings are real.
To learn more or schedule a consultation, reach out to the team at Pacific Skyline.