Cost Segregation is an IRS-approved income tax strategy that allows commercial property owners to re-classify thier building's components and improvements from real property to personal property.
This tax strategy allows the owner’s assets to be depreciated on a 5, 7, or 15 year schedule instead of the traditional 27.5 or 39-year depreciation schedule thereby reducing the amount of taxes owed.
5- and 7- year depreciation categories typically include such items as decorative building elements, electrical for dedicated computer equipment and carpet. The 15-year depreciation category typically includes site utilities, landscaping and paving.
These savings generate substantial cash flow that owners may use as they see fit and often use to reinvest in the business, purchase more property, apply to their principle payment or spend on themselves.
What Is Cost Segregation?
