Form 3115 Preparation for Look-Back Cost Segregation Studies

Capture missed depreciation from prior years with a look-back cost seg study and Form 3115 (DCN 7). We prepare both the original and Ogden duplicate filings.

Service specifications

Included on look-back. Turnaround: Filed with the current-year return..

Best suited for: Properties owned for one or more tax years where cost seg was not previously performed.

This tier follows the WeCostSeg engineering methodology described in our methodology page and aligned to the 13 Principal Elements of a Quality Cost Segregation Study in IRS Publication 5653 Chapter 4. Five years of written audit defense is included with every engagement at no additional charge. The CPA Coordination Protocol applies with preliminary analysis, draft review, and Form 3115 prep all coordinated with your tax preparer.

How this tier compares to the other WeCostSeg tiers

Every tier includes the same five years of audit defense, the same 13 Principal Elements compliance under IRS Pub 5653, and the same CPA Coordination Protocol. The differences are scope, inspection depth, and basis size addressed. The free preliminary analysis is the simplest way to confirm which tier fits a specific property before engagement.

What is included in this engagement

• Form 3115 (Application for Change in Accounting Method) preparation
• Designated Change Number 7 (DCN 7) under Rev. Proc. 2022-14
• Original filing with the current return plus Ogden duplicate per Rev. Proc. 2015-13
• Section 481(a) adjustment computation
• No amended returns required
• CPA-friendly handoff per the CPA Coordination Protocol

Every deliverable in the list above is part of the standard scope. The engineer-signed report ships with both the methodology disclosure and the supporting documentation archive (photos, source records, computation worksheets) that constitute the quality study under Pub 5653 Chapter 4. The five-year audit defense window begins on delivery of the final report and applies at no additional cost.

Frequently asked questions

What is Form 3115 and DCN 7?

Form 3115 is the Application for Change in Accounting Method. DCN 7 is the Designated Change Number under Rev. Proc. 2022-14 that covers a change from impermissible to permissible depreciation method, which is the change a look-back cost seg creates.

Why no amended returns?

The 481(a) adjustment moves the entire prior-year depreciation correction into the current year as a single catch-up deduction. The taxpayer does not amend the prior returns because the method change is treated as a current-year change.

Does this service include five years of audit defense?

Yes. Every WeCostSeg engagement includes five years of written audit defense at no additional cost. The defense aligns to the 13 Principal Elements of a Quality Cost Segregation Study under IRS Publication 5653 Chapter 4 and applies to correspondence audits, office audits, and field audits initiated within the five-year window.

How does WeCostSeg coordinate with my CPA?

Every engagement follows the three-touch CPA Coordination Protocol. We send a preliminary analysis to your CPA on intake, share the draft report five business days before final delivery, and coordinate Form 3115 filing timing when a Section 481(a) adjustment applies. Your CPA never pays a fee.

What OBBBA bonus depreciation rate will apply?

Property acquired and placed in service after January 19, 2025 under Public Law 119-21 (OBBBA) qualifies for 100% bonus depreciation on the 5-year and 15-year reclassified portion. Property under a binding contract on or before January 19, 2025 stays on the legacy phase-down: 40% bonus in 2025, 20% in 2026, 0% thereafter.

Can I get a free preliminary analysis before engaging?

Yes. Submit your property details via the free proposal form or WhatsApp. Our engineer returns a written estimate of your first-year deduction within four business hours during US Eastern hours. No payment, no contract, no obligation to proceed.

What methodology does the report use?

The detailed engineering approach from actual cost records, described in Chapter 3 of IRS Publication 5653 (Cost Segregation Audit Techniques Guide, February 2025 edition). The Guide identifies this approach as the most defensible methodology among the six it describes. The rule-of-thumb approach is identified as the least defensible.

Will this service work for a property held in an LLC or partnership?

Yes. The engineering analysis runs against the property regardless of holding entity. The Section 481(a) adjustment (for look-back studies) flows through K-1 to partners. Cost basis attribution to the holding entity follows the partnership's allocation rules.

How is pricing determined?

Standard tiers apply: $795 Rapid Report for residential under $800K basis, $2,495 Fully Engineered Residential up to $2M basis, $2,995 and up for commercial properties. Larger commercial properties scale based on basis and complexity. We quote per property after the free preliminary analysis.