COST SEGRATEGATION CONCEPT
A Cost Segregation Study (CSS) helps owners of commercial real estate identify ways to accelerate the depreciation deductions of their properties to significantly offset taxable income.
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.
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.
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.
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