Thanks,  Software cost seg is easy and accurate - diycostseg.com - they also provide audit defense. 

I know that they have to pay for the audit and reserve study for 2026, which will be around $7,500. 

My accountant wants me to start doing this in the event of an audit being I’m starting larger projects and will be implementing cost segregation Thanks

Three, they function more like the accounting systems I'm used to from my corporate days--you can't delete things as easily, so there's a clearer audit trail.

You’ve got depreciation recapture, passive activity rules, AMT, and audit risk to manage.

Some people will simply transfer the property anyway and then simply make sure they do not make late payments or otherwise default on the loan because most lenders won't spend the time and resources to audit the account and discover the change as long as borrowers are making on-time payments every month. 

It doesn’t have to be fancy; just consistent and clear enough to show your participation, especially if an audit comes up.Personally, I try to break things down by week, and add a summary of what I focused on (so if you have a template or method that makes this even easier, definitely share ideas!).

There is no official IRS form so the best practice is to use a simple spreadsheet or tracking app you can update regularly and retain for audit support.

In the event of an audit, you'd need to prove your passive.Assuming you're passive, then you can buy long term or medium term rentals and do a cost segregation study

Not following the rules can trigger audits or penalties.Business expenses: Just because something seems “business-related” doesn’t mean it’s fully deductible.