Cost segregation
In U.S. tax practice, a study identifying eligible property components and their applicable depreciation classifications. Shorter recovery periods can accelerate deductions and reduce or defer taxes.
Cost segregation in practice
Hypothetical: a facility owner commissions a study to determine which qualifying components should be depreciated separately from the building. Not every fixture or wiring component qualifies for a shorter life. Tax effects depend on the asset classification, placed-in-service facts, the taxpayer’s position and applicable rules.
Terms Related to Cost segregation
Depreciation · Adjusted basis · Purchase price allocation · Sale-leaseback · Pass-through entity · All of the glossary