In-Person vs Virtual Site Inspection: Does It Matter?
Virtual site inspection (video walkthrough with the owner or property manager guided by the engineer) is acceptable for residential properties under IRS Publication 5653 February 2025 edition. In-person inspection is preferred for commercial properties, hotels, restaurants, and properties with substantial FF&E or non-standard components. Both produce defensible studies when documented per the 13 Principal Elements.
Pub 5653 February 2025 update
The February 2025 edition of the IRS Cost Segregation Audit Techniques Guide explicitly addresses virtual inspections. Virtual is acceptable when the engineer documents the methodology and the limitations. The Guide does not require in-person for residential.
For commercial properties with substantial FF&E (hotels, restaurants, manufacturing), in-person inspection is preferred because the engineer can verify component conditions, ages, and ownership in person.
Virtual inspection mechanics
WeCostSeg residential studies typically use virtual inspection. The owner or property manager walks the property with a smartphone while our engineer guides the walkthrough by video. The engineer asks for specific component views, captures screenshots, and notes any items requiring follow-up.
Total time: typically 45 to 90 minutes for a residential property. The video is archived as part of the documentation supporting Principal Elements #10 (photographic documentation) and #11 (source documentation).
When in-person is mandatory
Hotels and motels (FF&E intensive), restaurants (kitchen equipment, dining furniture, decorative finishes), manufacturing facilities, large commercial portfolios, properties with extensive renovations not yet documented, and properties where the owner cannot or will not conduct the virtual walkthrough.
WeCostSeg quotes in-person commercial inspections separately. Travel costs are passed through. The engineering fee is the same.
Frequently asked questions
- How does WeCostSeg coordinate with my CPA?
- Every engagement follows the three-touch CPA Coordination Protocol. Preliminary analysis CC'd to your CPA on intake, draft report shared five business days before final delivery, and Form 3115 filing coordinated when a Section 481(a) adjustment applies.
- Does OBBBA's 100% bonus apply to my acquisition?
- 100% applies to property under a binding contract on or after January 20, 2025 per Public Law 119-21. Property under a binding contract on or before January 19, 2025 stays on the legacy phase-down: 40% in 2025, 20% in 2026, 0% in 2027 and after.
- Is audit defense included?
- Yes. Every WeCostSeg engagement includes five years of written audit defense at no extra charge, aligned to the 13 Principal Elements of a Quality Cost Segregation Study under IRS Publication 5653 Chapter 4.
- Can I get a free preliminary analysis?
- Yes. Submit property details via the free proposal form or WhatsApp. Engineer-reviewed estimate returned within four business hours during US Eastern hours.
Zawwad Ul Sami, Founder
Zawwad Ul Sami is the founder of WeCostSeg, a founder-led cost segregation firm serving real estate investors across the US. He focuses on strategy, pricing, and the firm's overall direction.