Cost segregation is a strategic real estate investment tax technique. Commercial investors use cost segregation to maximize their depreciation deductions on certain property components. By accelerating this depreciation, tax liabilities can be limited and cash flow can be maximized.
The cash flow benefits as the result of cost segregation allow investors to have more money in their pockets for upgrades, improvements, investments, etc. This widely accepted technique can be used by commercial real estate owners of any size.
Any real commercial property that is placed in service after 1987 is considered eligible for cost segregation. This includes properties that have been purchased, remodeled, expanded, or constructed since 1987. It is recommended that you begin your cost segregation study as soon as possible, as it is most beneficial from year one.