Cost Segregation is a form of accelerating depreciation for an owner’s real property purchase.

When you buy a business real estate property, it is depreciable over 39 years. This requires a substantial amount of time to pass for you to fully take advantage of the depreciation of your property purchase. The idea behind cost segregation is that there are personal property assets that are bought along with the real property asset. This includes items from the type of lighting to the type of parking lot.

From our experience, a cost segregation study usually costs approximately $3,000 to $6,000, though it can significantly vary based on the size of the property and the improvements and personal property involved.

It’s just important that you make sure to time your cost segregation study right so that you can do it for the year of purchase. Otherwise, once you start depreciating via straight line – you won’t be able to change!