How does multifamily cost segregation flow through to LP K-1s?

The accelerated depreciation generated by the study flows through the partnership return to each LP's K-1 in proportion to their capital account. Each LP's K-1 reports the accelerated deduction as part of their share of partnership losses, which they apply against their personal income subject to passive activity and at-risk rules. The engineered study delivers a basis schedule the partnership's CPA integrates into the K-1 template.

What does a multifamily cost segregation study cost for a $10M-$25M deal?

Fixed-fee $12,995 for institutional multifamily in the $10M-$25M basis range. Includes engineered study, K-1-ready basis schedule, MACRS reclassification tables, and CPA workpaper deliverable. Larger deals ($25M+) are priced by proposal, not as a percentage of basis or savings.

Can we do cost segregation on a multifamily property acquired in a prior year?

Yes. A Section 481(a) catch-up applies. The CPA files Form 3115 (Application for Change in Accounting Method) with the current-year return and the cumulative missed accelerated depreciation flows through in a single year. No amended prior-year returns required. Common for value-add MF acquired 2-4 years prior where the original allocation was straight-line 27.5-year only.

What is Partial Asset Disposition (PAD) for multifamily value-add?

PAD allows partial deduction of the remaining basis of building components retired during a value-add renovation — replaced appliances, flooring, cabinetry, paving, lighting, HVAC components, landscaping. For a typical 142-unit value-add with a $1.5M-$3M renovation, PAD can generate an additional $200K-$500K Year-1 deduction layered on top of the standard cost segregation reclassification. Modeled separately and requires renovation budget detail.

Do you coordinate 179D energy deductions for multifamily?

Yes — through coordination with a licensed mechanical engineer. 179D requires a separate energy modeling engagement by a qualifying engineer; we don't run that in-house. For value-add MF with HVAC, lighting, or envelope upgrades, the 179D deduction can add $1.80-$5.00 per square foot. We integrate the 179D allocation into the basis schedule and coordinate Form 3115 timing if both are filed together.

INSTITUTIONAL MULTIFAMILY · COST SEGREGATION

Cost segregation for multifamily syndicators, with the K-1 allocation already done.

Engineered studies for $5M–$50M+ multifamily basis. Built for sponsors who need to put accelerated depreciation into LP K-1s on a tight pre-close timeline — and for the acquisitions teams that procure the vendor.

Send your deal → See pricing Methodology

ANCHOR FEE

$12,995

$10M–$25M basis

PRELIMINARY

Same day

PDF estimate + quote

FINAL DELIVERY

2 weeks

post-close

RECLASS RANGE

15–22%

value-add MF typical

WORKED EXAMPLE · DEAL ANCHOR

142-unit value-add multifamily · Southeast secondary metro

PRE-CLOSE BASIS

$18,000,000

DEPRECIABLE BASIS (NET LAND)

$14,760,000

5-YEAR RECLASS

~9% · $1.33M

15-YEAR RECLASS

~7% · $1.03M

27.5-YEAR (RESIDUAL)

~84% · $12.40M

YEAR-1 ACCELERATED DEDUCTION

$1.70M – $2.25M

At a representative top federal bracket, the aggregate Year-1 tax benefit lands between $630K and $830K, distributed pro rata across LP capital accounts via K-1.

Partial Asset Disposition (PAD) modeled separately for components replaced during the value-add: appliances, flooring, cabinetry, paving, lighting, landscaping. PAD upside not included in the figures above.

ENGAGEMENT FEE · $12,995 · PRELIMINARY same day · FINAL within 2 weeks post-close

Numbers reflect a representative institutional MF value-add. Actual reclass percentages depend on age, finish level, common-area amenities, and renovation scope. Verify per-deal with engineered analysis.

FOR

Sponsors, GPs, and acquisitions teams at MF funds

▸ Acquiring or holding $5M+ basis multifamily
▸ Need accelerated depreciation flowing to LP K-1s on first-year filing
▸ Running value-add capex that PAD modeling can capitalize on
▸ Considering Form 3115 catch-up on prior-year acquisitions
▸ Your CPA wants a workpaper they can integrate, not a marketing PDF

NOT FOR

Smaller deals — we'll point you to the right surface

· 5–24 unit value-add for individual investors — see costsegsmart.com/multifamily-5plus/
· Office, retail, restaurant, industrial — see commercialcostseg.com
· Single-family rental or duplex — see costsegsmart.com
· Vendor comparison / provider reviews — see costsegregationreviews.com

TRANSACTION COMPLEXITY LADDER

Where this practice sits in the cost-seg market

Asset type	Study complexity	Typical coordination
SFR / STR (single property)	Low	CPA only
Small MF · 5–24 units	Moderate	CPA + individual investor
Value-add MF · single asset	High	CPA + sponsor + renovation team
Syndicated MF · institutional MFCS	Institutional	K-1 allocation + PAD + §754 + Form 3115
Multi-asset MF portfolio	Institutional+	Aggregate basis tracking + per-entity K-1s

WHERE THIS PRACTICE LIVES IN THE COST-SEG MARKET. NETWORK SISTER SITES HANDLE THE TIERS ABOVE AND BELOW.

K-1 ALLOCATION

Built around how the deduction flows to your LPs.

The study deliverable is a basis schedule your CPA integrates into the partnership return. Each LP's pro-rata share lands on their K-1 the same year the property is placed in service.

K-1 ALLOCATION · ILLUSTRATIVE

Year-1 accelerated deduction flows through to LP capital accounts

Each LP receives their pro-rata share of the accelerated depreciation via K-1. Sponsor receives carry-share + their own LP share if invested alongside.

27%

24%

17%

13%

LP cohort A · $4M committed 27%

LP cohort B · $3.5M 24%

LP cohort C · $2.5M 17%

LP cohort D · $2M 13%

LP cohort E · $1.5M 10%

Sponsor / GP 9%

Example assumes a single-asset value-add with 5 LP cohorts and a sponsor co-investment. Each fund's waterfall structure varies; the engineered study delivers a basis schedule the CPA can integrate into your specific K-1 templates.

PRICING

Published, fixed-fee, comparable.

FULL PRICING TABLE →

Tier	Basis	Typical units	Fee
Small institutional	$2M–$5M	25–75 units	$4,495
Mid institutional	$5M–$10M	75–150 units	$7,995
Institutional anchor	$10M–$25M	100–250 units	$12,995
Portfolio / large deal	$25M+	250+ units or multi-property	By proposal

NOT YOUR DEAL SHAPE?

Where to go for adjacent cost-seg needs

This site is institutional multifamily. For different deal shapes, the right surfaces are:

· 5–24 unit multifamily for individual investors → costsegsmart.com/multifamily-5plus/
· Office, retail, restaurant, industrial, hospitality → commercialcostseg.com
· Comparing cost-seg providers → costsegregationreviews.com
· IRS reference material on §168(k), §469, §280A → irsdepreciationrules.com

NEXT STEP

Send your deal. Preliminary estimate back within 24 hours.

Pre-close diligence-friendly intake. Purchase price + market + unit count is enough to ballpark the study. Final scope confirmed at close.

Send the deal →