There are several benefits to using cost segregation. In addition to reducing taxable income in the short term, it can also increase cash flow and improve the overall return on investment for the building

Yes, cost segregation is subject to review by the Internal Revenue Service, and it is important to carefully document and analyze the assets being reclassified. As a result, it is important to work with a tax professional or other qualified adviser when considering this strategy.

Cost segregation is generally only used for commercial properties but it can be used for residential properties if they are owned as investments. It can not be used on residential properties that you live in as a full-time residence.

No, cost segregation can also be used for existing buildings that have undergone significant renovations or improvements. However, the rules for reclassifying assets in these cases may be different than for new construction or acquisitions.

A cost segregation study can be conducted once for every property a taxpayer constructs, purchases, or inherits. Yet, when substantial enhancements are made to the property following its activation, these improvements create openings for extra cost segregation studies and added depreciation deductions.

For instance, notable enhancements like building expansions or remodels offer opportunities for a fresh cost segregation examination.

In the scenario where a different taxpayer procures a property that underwent a prior cost segregation study, the IRS suggests initiating a new cost segregation study for the new owner. This is due to the distinct circumstances surrounding the property under its new ownership.