Top Six Cost Segregation Firms To Help Real Estate Owners Save Taxes

Real estate is a potentially lucrative market that can earn you a lot of money. Sadly, this is often met by extortionate taxes.

As a real estate owner, you already face several challenges to keep your finances in great health. From working with the best construction companies and realtors to managing mortgage payments, there’s a lot to do.

So, ensuring that your tax obligations are as low as possible can make a huge difference and should be considered a priority. Cost segregation and understanding asset depreciation is the ideal solution. 

Thankfully, you don’t have to take on the challenge alone. Here are six of the best cost segregation firms on the market, allowing real estate investors to focus their attention elsewhere while still gaining maximized financial benefits.

1. R.E. Cost Seg

R.E. Cost Seg, Real Estate Cost Segregation, is considered one of the best options on the market. The firm is known for offering best-in-class cost segregation studies for real estate investors to maximize their tax savings with faster turnaround and lower costs than traditional providers.

Crucially, unlike some generic cost segregation companies out there, their tactics are tailored specifically with real estate investors in mind.

The company  has already helped real estate investors save over $1bn in taxes across a portfolio of over 10,000 properties. R.E. Cost Seg actively enables users to identify faster-depreciating assets and reclassify them into their IRS-approved categories.

This is supported by efficient cost segregation that means paying less tax while simultaneously maximizing real estate asset investments to increase profitability.

R.E. Cost Seg. understands that quality matters, using the Replacement Cost New Less Depreciation methodology to deliver accurate audits and faster tax benefits.

Their services can be used across a wide range of real estate assets including short-term rentals, hotels, shopping centers, ranches, warehouse facilities, office buildings, nursing homes, apartment complexes, gas stations, restaurants, industrial manufacturing spaces, and self-storage facilities. 

Whatever stage of the real estate investment journey you’re at, R.E. Cost Seg. will support better tax efficiency. Better still, they can work alongside your accountant if preferred.

2. CSSI 

CSSI, Cost Segregation Services, Inc., is one of the longest-standing cost segregation services in the American market. The company has spent decades working with CPAs and tax advisors to deliver engineering-based cost segregation studies that satisfy IRS scrutiny. 

While primarily suited to large portfolios and high-value properties where in-depth data helps unlock substantial depreciation benefits, the firm is open to smaller investors too. However, it should know that there is a higher than average price point compared to newer solutions on the market.

Still, CSSI is a good option for real estate investors with a portfolio covering both commercial and residential assets. This may include multifamily properties, as well as industrial and hospitality classes. 

3. Kreig Devault 

Kreig DeVault LLP is a tax speciality firm that boasts national recognition. As well as cost segregation services, it provides a range of broader tax advisory services. Therefore, it can be a great option for new real estate investors who haven’t taken care of those matters already.

The IRS-complaint methodologist and detailed documentation processes are designed to support accelerated depreciation claims, allowing investors to benefit from reduced tax requirements and bonus depreciation to hold more cash for further investmnets.

Their advisor-led approach can be tailored to suit a passive or hands-on approach while the firm’s agents can work directly with accountants should this approach be deemed preferential. As a comprehensive service, it is one of the best around.

4. ETS

ETS - Engineered Tax Services - is another full-service tax consulting firm. While it is primarily aimed at supporting investors who need R&D tax credits and energy studies, its stand alone cost segregation services can still help real estate investors generate savings.

The company’s licensed engineers work on a diverse range of property types including retail, hospitality and mixed-use developments to produce clear reports that meet IRS standards.

The defensible data can help with faster depreciation claims to reduce the firm’s tax obligations.

While investors may have to deploy a more hands-on approach than they would with some, ETS is a strong choice for investors who have complex assets or manage multiple tax strategies at once.

5. Cost Segregation Authority

Cost Segregation Authority prides itself on delivering fast, accurate cost segregation studies for real estate investors nationwide while using proven methodologies to identify and reclassify assets into shorter depreciation lives. This translates to reduced tax obligations.

Investors who want a balance between speed and affordability without losing sight of compliance could do far worse. Not least because Cost Segregation Authority additionally offers clear reports that integrate seamlessly with CPA workflows.

The firm is a suitable choice for owners of apartment buildings, office properties, and retail spaces. It may not deal with all complex matters to quite the same level, but its fast turnarounds can help investors unlock a better financial future to spearhead their subsequent investments.

6. PWC

PWC is a global professional services network that offers tax advisory and fixed-asset services. While this covers a wide range of industries, real estate investors can certainly benefit, although cost segregation isn’t a standalone service.

Nonetheless, working with a global leader brings peace of mind regarding accuracy and compliance. The downside is that it can cost more and might not deliver the same level of financial benefits. Still, the depreciation calculations do compete with the market’s best.

PWC’s compliance-first approach makes it a good choice for institutional investors and enterprise-scale portfolios, not least thanks to the high levels of document defense, but smaller real estate investors may prefer to look elsewhere. 

The Final Word

When using cost segregation firms to save on taxes in the real estate investor industry, it’s important to find one that aligns with your needs. The costs, hands-on requirements, and suitability for your portfolio are all key factors. 

One thing is for sure, though, the days of trying to go it alone - or simply miss out on eligible tax savings linked to asset depreciation - are a thing of the past.

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