Ollie's classroom

Everything you need to know before you owe less.

No gatekeeping, no jargon walls. This is the whole subject, in plain English, free — because an educated owner makes a better study.

Lesson one

The four depreciation clocks

Every dollar of your building's cost belongs on one of these clocks. A cost segregation study is simply the engineering evidence for moving dollars off the bottom row.

5 yearsCarpet, decorative lighting, cabinetry and millwork, appliances, specialty electrical and plumbing serving equipment
7 yearsCertain furniture, fixtures, and equipment depending on use
15 yearsLand improvements — parking lots, sidewalks, fencing, landscaping, site utilities
27.5 / 39 yearsThe building shell: structure, roof, general electrical and plumbing, HVAC serving the building

Lesson two

The 13 elements of a quality study

The IRS Cost Segregation Audit Techniques Guide (Publication 5653) lists the principal elements of a quality study. These aren't Ollie's opinion — they're quoted from the guide itself, and every Ollie study is scored against them.

Ollie is fetching the official element list… if it doesn't load, the full interactive version lives on the platform's 13-elements page.

Lesson three

Words your CPA will use (decoded)

Depreciable basis

What you paid for the property minus the land value — land never depreciates. This is the pot the study divides.

Bonus depreciation

A provision letting you deduct a large percentage of qualifying short-life property in year one instead of spreading it out. The rate depends on when the property was placed in service — Ollie applies current law automatically.

Placed in service

The date the property was ready and available for use — this, not the purchase date, starts the depreciation clock and sets your bonus rate.

§1245 vs §1250 property

The tax code's dividing line: §1245 is personal property (fast clocks), §1250 is real property (slow clocks). Every component in your study is classified with a citation.

Form 3115 / §481(a)

The mechanism for catching up depreciation you missed in prior years — an automatic accounting-method change, no amended returns. Ollie computes the adjustment.

Recapture

When you sell, accelerated deductions can be partially recaptured at ordinary rates. It's a timing trade, usually a good one — but it's why you model before you file. Ollie shows both sides.

Class dismissed. Homework: your building.

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