What & Why

Apartment Building

What Is Cost Segregation?

For real estate, Cost Segregation is the process of identifying building components and assigning depreciable lives and values to the various components to properly compute depreciation. The result is the depreciation of a building faster than straight-line 39 or 27.5 years

Why Use Cost Segregation?

The tax code provides very favorable rules for depreciating the cost of a building at an accelerated rate. Increased depreciation deductions decrease taxable income, reduce income tax, and increase cash flow. Within the first five years of building ownership, you could save up to $100,000 for every $1 million in building costs