SUMMARY OF 

COST SEGREGATION CONTENT:

A Cost Segregation Study (CSS) is a detailed, engineering-based analysis used to support the acceleration of depreciation deductions on commercial real estate. This process identifies assets that can be reallocated to shorter recovery periods of primarily 5-, 7-, and 15-years, as opposed to 27.5- or 39-years. In this manner, an individual can create significantly more in deductions to offset taxable income and substantially improve cash flow.

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A Cost Segregation Study (CSS) does not create more in total depreciation deductions, it simply accelerates the deductions into the early years of ownership. This front-loading of depreciation allows commercial real estate owners to take advantage of the time value of money by freeing up cash flow for immediate reinvestment.

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Depending on the facts and circumstances of the property, a Cost Segregation Study (CSS) typically reallocates 15-40% of the total depreciable cost basis to the shorter recovery periods detailed previously.