Cost Segregation is an IRS-approved methodology that is used to accelerate asset depreciation and reduce federal income taxes for owners and users of commercial properties. A Cost Segregation Study identifies real property and personal property assets and reclassifies personal property assets from 27.5 or 39-year depreciation schedules to 5, 7 or 15-year depreciation schedules.
This maximizes depreciation expenses and reduces federal income tax obligations. Reduced income tax obligation consequently benefit property owners and businesses with increased cash flow. Cost Segregation can also be conducted on older properties either constructed or acquired in prior tax years. In this “Look Back” format, the catch-up depreciation is reflected on the next income tax filing and potentially provides property owners or businesses with substantial tax refund
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