The short answer
Offer a study in the tax year a building or an improvement is placed in service, meaning ready and available for its use. A purchase, a completion or an interior renovation is the usual sign of that year, though not the date itself (IRS Publication 946). Each of these can leave a record you can watch: a deed, a certificate of occupancy or a completion announcement, a building permit. Start from those records, find the company that owns the property, and reach the person who handles its taxes before that year’s return is filed.
Why the year of the event matters
A study splits a building’s cost into parts with different tax lives. The building itself is generally written off over 27.5 years if it is residential rental property, or 39 years if it is nonresidential. Equipment, furniture and fixtures in it can be written off over 5 or 7 years (IRS Cost Segregation Audit Technique Guide), and land improvements such as fences, roads and sidewalks over 15 years (IRS Publication 946).
Depreciation starts when the property is placed in service, meaning ready and available for its use, so the first year is when the owner’s schedule is set. Since 2025 the first year counts for more: a law of July 2025 made a 100% first-year deduction permanent for property acquired and placed in service after 19 January 2025, under rules the IRS has set out for deciding which property is eligible (IRS, January 2026). It covers property with a tax life of 20 years or less, so the eligible 5-, 7- and 15-year parts a study finds can be deducted in full in the first year (IRS Publication 946).
A study can still be done years later. For a building bought or built in an earlier year, the missed depreciation is generally caught up through a change in accounting method on Form 3115, not by amending old returns (IRS Cost Segregation Audit Technique Guide). Older purchases are prospects too; the year of the event is simply when the question is already on the owner’s desk.
Three records to watch
What each kind of record shows, and what it leaves out, is covered in permits vs acquisitions. For a cost segregation firm:
- A purchase. The deed is recorded with the county and names the buyer and the date (New York City’s ACRIS, for example). Depreciation starts when the building is ready and available for its use, which can be later than the purchase: the IRS’s example is a house bought on 6 April, repaired, and ready for rent on 5 July, placed in service in July (IRS Publication 946). The 100% first-year deduction can apply to certain used property as well as new (IRS Publication 946).
- A completion. A new building is placed in service when it is ready for its use. The signs are a certificate of occupancy, which New York publishes as open data with the address, the type of job and the date of issue, and the developer’s own announcement. A developer that keeps the building is the one to approach for the year it opens. One that builds to sell generally can’t depreciate it: “You cannot depreciate inventory”, which is “any property you hold primarily for sale to customers in the ordinary course of your business” (IRS Publication 946), so there the buyer is the prospect.
- A renovation. An improvement the taxpayer makes to the interior of a commercial building and places in service after 2017, after the building was first placed in service, can be qualified improvement property, generally written off over 15 years rather than 39, unless it enlarges the building or is an elevator, an escalator or part of the internal structural framework (IRS Publication 946). That taxpayer can be a tenant: someone leasing a property generally can’t depreciate it, but “You can, however, depreciate any capital improvements you make to the property” (IRS Publication 946), so for a tenant’s fit-out the tenant may be the prospect. A renovation permit shows the work and the address, and some cities also publish a reported cost: Chicago’s permit data includes the applicant’s estimate, where one was given.
What to check before you reach out
- Who owns it. Deeds and permits often name an LLC set up for one property. Find the company behind it first: see how to find the developer behind a property LLC.
- The size. The price on the deed, where the state records it, or the cost on the permit is a rough first screen: a price includes the land, and “You cannot depreciate the cost of land” (IRS Publication 946), while a permit’s cost is the applicant’s estimate.
- The type. Match the property types you know best: apartments, offices, retail, industrial or hotels.
- Whether a study is arranged. The deed or permit won’t show it, so ask.
- Who decides. At the owner, the CFO or the controller, and the outside accountant who prepares the return.
What to write
Keep it short and about their building: the event you saw, one similar study you have done, and one question, such as whether a study is already arranged for this property. Send it soon after the event; if that year’s return is already filed, a study can still catch up the missed depreciation.
How Buildwise does this
Buildwise is a service, not a database. We use technology we’ve built to track building permits, real estate transactions and construction projects, and select the ones that match your services and market. For each one we identify the company behind it, check it against your criteria and find the people who decide. Our team runs the outreach from your accounts, after you approve the messages and a sample of the companies and contacts. Tax & valuation shows how this works for a cost segregation firm. See our services.
