What property types benefit most from accelerated depreciation with a Cost Segregation Study?
Many of the costs embedded in a new or existing building can be segregated into categories that also allow for more rapid — or accelerated — depreciation. Many items inside the building – furnishings, fixtures, flooring and the like – can be depreciated more quickly, over 5 to 7 years; and the site improvement components can be depreciated over a 15-year period.
Best suited for:
- Real estate construction valued at over $1 million
- Building acquisitions or improvements
- New buildings under construction
- Existing buildings undergoing renovations or expansions
Best savings potential:
- Office buildings
- Shopping centers
- Warehouses and distribution centers
- Manufacturing and industrial plants
- Medical facilities
Learn more about accelerated depreciation and cost segregation studies. The CSS can be done independently or conducted in parallel with a Property Condition Report, an Environmental Site Assessment. The IRS has detailed information on cost segregation techniques, as well as this Motley Fool article.
For investors considering whether to purchase a commercial property and for real estate brokers trying to make a marginal transaction feasible, a Cost Segregation Analysis may be essential and Criterium Engineers is uniquely qualified perform it.
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