Definition
Cost segregation is a tax strategy reallocating property costs across multiple depreciation schedules for faster deductions. Studies cost $4,000-7,000 but create 100,000s in accelerated deductions.
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Cost segregation separates building (27.5 year), personal property (5-7 year), and land improvements (15 year) for faster deductions. Studies cost 4,000-7,000 but create 100,000s in accelerated deductions. Complex strategy; requires tax professional.
Pro Tip
Cost segregation is advanced strategy for significant properties. Work with specialists.
Example
Cost segregation study reallocates $30,000 from building (slow depreciation) to personal property (faster depreciation)