What Is Cost Segregation?
When you purchase a property, everything is being depreciated as one single line item on your
depreciation schedule over 27.5 years if it’s a multifamily property or 39 years if it’s a
commercial
property or Airbnb. What an engineered cost segregation study does is break your property into
40-50
different components and place those different components into their correct, shorter class
lives.
Your goal as an investor is to shorten down the life of as many assets as possible. Cost seg
allows you
to depreciate property over a faster schedule which increases your annual depreciation, which
reduces
your income, which reduces your tax liability and ultimately increases your cash flow.
Cost segregation works on both new and existing properties so even if you have owned a property
for a
few years and wasn’t familiar with cost seg, we can pull forward all the money you left on the
table
since you purchased the property and pull that into the present tax year.
Please don’t hesitate to reach out if you have any questions about your properties or a
prospective
property you are thinking about purchasing. Look forward to hearing from you.
