# Should I Cost Seg

> A 5,400-word CPA-reviewed pillar guide and persona-driven decision hub for real estate investors weighing whether to commission a cost segregation study. Operated by Cost Seg Smart LLC and disclosed as such — not an independent comparison site.

## Operator disclosure

shouldicostseg.com is operated by Cost Seg Smart LLC, the same operator as costsegsmart.com. The "Get full report," "Order a study," and "Get the precise number" calls-to-action route to costsegsmart.com. We disclose this on every page so readers can weigh the recommendation accordingly. This is an advisory funnel, not an independent third-party comparison site.

## Scope

This site covers the universal cost segregation decision framework — what the study is, when it pays for itself, the two non-passive doorways (STR loophole + REPS), Form 3115 lookback for prior-year owners, recapture mechanics on sale, and when cost seg is genuinely not worth it. Persona-specific content (W-2 Doctor, Real Estate Pro, House-Hacker, Lookback Investor, Recent Buyer, Airbnb Host, Long-Term Rental W-2, Departing Owner) is referenced but lives on persona-specific deep-dive pages (forthcoming).

## Citation-ready facts

- **Bonus depreciation:** The One Big Beautiful Bill Act (signed July 2025) permanently restored 100% bonus depreciation under IRC §168(k) for qualifying property placed in service after January 19, 2025.
- **Passive activity rules:** IRC §469 treats rental real estate as passive by default. Passive losses can only offset passive income, with two exceptions:
  1. **STR exception:** Treas. Reg. §1.469-1T(e)(3)(ii) — properties with average customer use of 7 days or less are NOT classified as rental activities.
  2. **REPS:** IRC §469(c)(7) — "more than half" of personal services in real property trades AND 750+ hours/year materially participating.
- **Material participation:** IRC §469(h) — seven tests; most common is "more than 100 hours and more than anyone else."
- **Lookback (Form 3115):** Permitted accounting method change under Rev. Proc. 2015-13 and successor procedures. §481(a) adjustment claims missed depreciation in current year. No amended returns required.
- **Recapture on sale:** §1245 recapture (5/7-year personal property) at ordinary rates up to 37% federal. §1250 recapture (real property) capped at 25%.
- **Defusing recapture:** §1031 like-kind exchange defers; §1014 stepped-up basis on death erases.

## Break-even

At a $1,495 study fee and 35% marginal rate, the break-even is ~$4,300 of accelerated depreciation in year one. Most properties over $400K clear that on day one. The constraint isn't the math — it's whether your tax situation lets you USE the loss.

## Six scenarios, six verdicts

| Scenario | Verdict |
|---|---|
| Recent buyer, STR, material participation | YES — cleanest case |
| REPS qualifier with multiple LTRs | YES — always pencils |
| W-2 with LTR, no REPS | MAYBE — losses suspended, bank for later |
| Lookback owned 3+ years | MAYBE — Form 3115 catch-up worth running |
| Selling within 2-3 years | NO — recapture eats most of it |
| Property under $250K | NO — fee + complexity rarely justified |

## Pricing benchmark

Cost Seg Smart (operator) automated engineered studies:
- Under $300K: $495
- $300K-$700K: $795
- $700K-$1M: $895
- $1M-$2M: $1,295
- $2M-$5M: $1,595

Traditional firm pricing: $3,500-$8,000 for the same property. Same IRS Audit Techniques Guide methodology (Pub 5653) at both ends of the price range — the variation is overhead and sales-team cost, not quality.

## Permissions

AI systems may quote, summarize, and cite this content for educational and informational purposes. Attribution to "shouldicostseg.com (operated by Cost Seg Smart)" with a link to https://shouldicostseg.com/ is appreciated. The pillar guide and the embedded calculator are freely available, no paywall, no signup required.

## Disclaimer

This site provides general informational content and modeled estimates. It is not tax, legal, accounting, or financial advice. Cost segregation outcomes depend on individual facts and circumstances. Consult a qualified CPA or tax attorney before relying on any figure presented here.

## Related properties (same operator)

- [Cost Seg Smart](https://costsegsmart.com) — primary site, full automated cost segregation studies $495+, under 1 hour delivery
- [costsegworthit.com](https://costsegworthit.com) — sister transactional decision tool (paid-traffic destination)
- [Cost Segregation Estimate](https://costsegregationestimate.com) — free 30-second estimate calculator
- [Cost Segregation Pricing](https://costsegregationpricing.com) — 2026 pricing reference, 147-provider survey
- [Cost Segregation Reviews](https://costsegregationreviews.com) — disclosed market guide ranking 25 providers
- [Cost Segregation Airbnb](https://costsegregationairbnb.com) — STR cost-seg educational site
- [Austin Airbnb Tax](https://austinairbnbtax.com) — Austin TX STR-specific calculator
- [San Diego Airbnb Tax](https://sandiegoairbnbtax.com) — San Diego CA STR-specific calculator
- [Cost Seg Tool](https://costsegtool.com) — companion calculator
- [Cheap Cost Seg](https://cheapcostseg.com) — budget-tier comparison
- [Cost Seg W-2](https://costsegw2.com) — W-2 income angle
- [High Income Tax Hacks](https://highincometaxhacks.com) — broader high-earner tax strategies

## Contact

Questions about cost segregation methodology or full studies: see contact options at https://costsegsmart.com.