Question 1

What is a cost segregation study?

Accepted Answer

A cost segregation study splits a property into the parts that wear out at different speeds. Most residential rental property is depreciated as a single lump over 27.5 years. A study separates out the shorter-lived parts — appliances, carpet, light fittings and cabinets over 5 years, and site improvements such as a driveway, fencing and planting over 15 years — so each is depreciated over its own recovery period rather than the building's.

Question 2

Does a human review the study?

Accepted Answer

No. Artificial intelligence reads the walkthrough video and the documents, and nobody at Split Basis inspects the property or reviews the study. The owner confirms what the software believes it has found, and is expected to have the study reviewed by a qualified tax professional before relying on it. Split Basis is not an accountant, engineer or appraiser, and does not represent anyone before the IRS.

Question 3

How is each cost worked out?

Accepted Answer

Every priced line cites the construction cost book line it was taken from, by line id and edition, frozen at the moment of pricing. Quantities are derived from a stated rule — one per bathroom, or the gross building area — and anything that cannot be derived is printed as outstanding rather than estimated or dropped.

Question 4

What does the owner have to do?

Accepted Answer

Three short sittings, spread over as long as they like: answer a handful of questions about the property, upload the closing statement and tax bill, and film one slow walk through the house on a phone. Nothing is lost between sittings.