A Cost Segregation Study is a tax savings tool for individuals and companies who have recently acquired, constructed, or renovated buildings. Cost segregation reduces current income tax liabilities and increases near-term cash flow by accelerating depreciation deductions for qualifying components of your real estate. These components are often previously classified as subject to 39-year depreciable life for a commercial building and 27.5-year for a residential building.
During the study, a cost segregation specialist will identify assets of your building that can be reclassified into a shorter depreciation recovery period. Along with freeing up significant cash flow and reducing income tax, there are many benefits to this: