Cost Segregation. Look closer at your property investment.
Explore whether a detailed review of your building and improvement costs could identify assets with shorter depreciation recovery periods.
Start with your property type, acquisition details, and depreciation schedules.
Property profile
Review the building, its use, and when it entered service.
Cost detail
Gather acquisition, construction, and improvement records.
Tax coordination
Assess the potential impact with your tax adviser.
Your building includes more than one kind of asset.
A cost segregation study examines property costs to identify components that may be depreciated separately from the building. The work combines asset identification, cost analysis, and support for the proposed classifications.
The review can begin with acquired, constructed, or improved commercial and investment property. Property use, dates, ownership, and the quality of records shape the assessment.
The potential benefit is a change in the timing of depreciation deductions. Its usefulness depends on your tax position, applicable limitations, study costs, and future plans for the property.
Read the IRS depreciation guideBuild the review around the property’s actual costs.
Consider both the physical assets and the tax records already in place.
Commercial property
Discuss offices, retail, industrial, and other business property, including its use and ownership.
Investment property
Review income-producing property and improvements with the dates and costs needed to assess depreciation.
Construction and improvements
Identify project costs, component detail, and invoices for construction or renovation work.
Existing depreciation
Compare current schedules with the proposed treatment and discuss accounting-method or filing implications.
Start with the property and the investment behind it.
Bring the address, use, acquisition history, and major improvements you want assessed.
- Property address, use, and ownership entity
- Purchase price or construction cost
- Placed-in-service dates and improvement history
- Depreciation schedules and adviser contact
From property overview to a documented study scope.
Establish the facts and potential value before committing to a study.
Discuss the property
Share the property type, investment amount, dates, and available cost records.
Assess feasibility
Review the proposed scope, specialist approach, supporting records, and study fee.
Coordinate tax treatment
Have your adviser assess findings, limitations, and any required return or accounting-method steps.
Questions before you begin?
Common questions about cost segregation.
Ask us a questionIs cost segregation a tax credit?
No. It concerns the classification and recovery periods of depreciable property costs. It may accelerate deductions rather than create a separate credit.
Does it apply only to new buildings?
Acquired property and existing improvements can also be assessed. Dates, records, and current tax treatment determine what review is appropriate.
Are immediate savings guaranteed?
No. Value depends on the assets identified, your ability to use deductions, applicable rules, fees, and future tax consequences.
Do I need a site visit?
Ask the proposed provider how it will document assets and costs. The appropriate inspection and evidence depend on the property and study approach.
What if I sell the property?
A sale may have depreciation recapture and other tax consequences. Discuss your holding period and exit plans with your tax adviser.
See whether your property warrants a closer look.
Discuss your investment, available cost records, and the goals behind a cost segregation review.