Cost Segregation Analysis
Identifies and reclassifies personal property assets to shorten the depreciation time for taxation purposes, which reduces current income tax obligations. Personal property assets include a building’s non-structural elements, exterior land improvements and indirect construction costs.The primary goal of a cost segregation study is to identify all construction-related costs that can be depreciated over a shorter tax life than the building. Personal property assets found in a cost segregation study generally include items that are affixed to the building but do not relate to the overall operation and maintenance of the building. Recent tax regulation changes have potentially increased the value of cost segregation studies of purchases of single family rental investment property.
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This sizing gives you info about the value of replacement properties you need to purchase and the amount of related debt on this purchase to fully defer your capital gains associated tax liability.
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two.
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