What documents do you actually need for a cost segregation study?

Most people expect a cost segregation study to be a production, an engineer in a hard hat, a day of measuring the property, a bill to match. For a 1-4 unit residential rental, it isn't. The whole thing runs on a handful of documents you almost certainly already have, plus a short call to fill in the gaps. Nobody drives out to the property. This post is the actual list: what we need from you, why each piece matters, and what it does for your deduction.

The short version: three documents do most of the work.

If you sent us nothing else, three documents would carry a residential study: your closing settlement statement, something that supports the land-versus-building split, and your current depreciation schedule. Everything else on the list sharpens the result. It doesn't gate it. Here's what each one is doing.

Why we ask for the closing settlement statement first.

The settlement statement (the ALTA or HUD-1 you signed at closing, or the Closing Disclosure) is the backbone of the study. It establishes what you actually paid, and it captures the closing costs that get capitalized into your basis rather than deducted: title fees, recording charges, transfer taxes, and the like. Your depreciable basis is not the Zillow estimate and it's not your loan amount. It's the purchase price plus those capitalizable costs, minus land. Get this one document right and the rest of the study sits on solid ground.

How we split land from building without guessing.

Land doesn't depreciate, so before anything gets reclassified we have to carve it out. We don't eyeball it. The cleanest source is your county assessor's card, which already breaks assessed value into land and improvement. We apply that ratio to your actual cost. If you have a purchase appraisal, better still; it usually supports a more defensible split. This is one of the quiet places studies go wrong. Assume too little land and you've overstated basis; assume too much and you've left deduction on the table. A document beats a guess every time.

What your depreciation schedule tells us.

Your CPA's depreciation schedule, the Form 4562 detail from your last return, tells us two things we can't get anywhere else: the exact date the property was placed in service, and how much basis you've already been depreciating. We need both so we reclassify against the right number and never double-count something your accountant already booked. And if you bought years ago and never did a study, this same schedule tells us exactly what has already been claimed, so the report lines up with your CPA's records instead of fighting them.

The nice-to-haves: photos, floor plans, and renovation invoices.

None of these are required, but each one makes the reclassification tighter. Photos and a floor plan help us identify the finish-out that qualifies for shorter recovery periods, flooring, cabinetry, specialty electrical, decorative lighting. If you renovated after buying, the invoices matter: a $40,000 kitchen-and-bath refresh is usually loaded with 5- and 15-year property, and itemized invoices let us claim it precisely instead of conservatively. Short-term rental owners tend to have the most to gain here, since furniture, appliances, and outdoor improvements pile up fast.

So why is there no site visit?

Because for a 1-4 unit residential rental, a physical walk-through rarely changes the answer, the documents above, combined with public property data, give us what an inspection would. We lay out the full reasoning in “Do you really need a site visit?” The short version is that the study is still audit-ready: it follows the IRS Cost Segregation Audit Techniques Guide, ties every reclassification back to a source document, and is reviewed and signed off by a qualified licensed tax professional. Audit-ready, not audit-proof. No study is audit-proof, and anyone who tells you otherwise is selling something.

How three documents become an $88,000 first-year deduction.

Here's the arithmetic on a real-shaped example. Say you bought a single-family rental for $500,000, placed in service in 2026. Your settlement statement puts capitalizable basis at $500,000. Your assessor's card allocates 20% to land, so $100,000 is land and $400,000 is depreciable building. A typical residential study reclassifies about 22% of that building basis (roughly $88,000) out of the 27.5-year bucket and into 5-, 7-, and 15-year property. Because the property was acquired (contract signed) and placed in service after January 19, 2025, that reclassified amount is eligible for 100% bonus depreciation, so the full $88,000 is deductible in year one. At a 32% marginal federal rate, that's about $28,160 in first-year tax savings, against a fixed, flat study fee. Three documents, one call, and that's the swing. (You can ballpark your own property with the savings calculator on our homepage.)

What happens after you send everything.

You upload the documents through a secure link, we run the study, and you get a deliverable your CPA can implement without translating anything: the reclassification detail, the supporting basis, and the licensed-professional sign-off. If it turns out a study doesn't pencil for your property, we'll tell you before you pay a dollar. That candid yes-or-no is the entire point of the first call.