Did you acquire a commercial or rental property years ago and think the window for cost segregation had closed? Many investors, and even their CPAs, believe amending past returns is the only option. They are mistaken. Carlos from US Tax Advisors Group clarifies a powerful strategic tool: the Cost Segregation Lookback Study.

If you placed a property in service in a prior tax year (e.g., 2020, 2018, or even earlier), you can still perform a study and claim the "catch-up" depreciation all in one year, without the hassle of amending returns.

The process uses IRS Form 3115 (Application for Change in Accounting Method). This form allows you to correct your depreciation method and claim all previously missed deductions as a single, often substantial, "481(a) Adjustment" in the current tax year.

"You can do lookback studies all day long, without having to amend... it allows you to tackle catch-up depreciation. This is how much you owe me, Uncle Sam."

Your Depreciation Schedule is the Key.
For a lookback study, your existing depreciation schedule is our essential roadmap. It provides the critical data we need:

• Date Placed in Service

• Original Building Cost Basis (land is already separated)

• Accumulated Depreciation Taken to Date

A responsible lookback analysis starts with a frank assessment. We review your schedule to determine if a significant benefit still exists. For properties held and depreciated for a very long time on a low original basis, the benefit may be minimal. We will tell you upfront if it’s worth proceeding.

Serious real estate investors need serious tax guidance. Online tax platforms often lack the sophistication for strategies like this. A knowledgeable CPA or Enrolled Agent is crucial to successfully filing Form 3115 and maximizing this opportunity. Send us your depreciation schedule for a complimentary benefit analysis. We’ll quantify your potential catch-up depreciation and provide a clear path forward.

Find Out What You've Been Missing.