Cost segregation, or 179 Deduction, is a strategic planning tool that can assess an entity’s real property assets and identifies a portion of those costs that can treated as personal property. By identifying personal property to be segregated from the building, the studies can reassign costs that would depreciate over a 39-year period to asset groups that depreciate more quickly or perhaps are even expensed immediately.
To improve cash flow, an investor essentially accelerates depreciation of any recently purchased or renovated commercial, industrial, or rental real estate investments by engaging in a cost segregation study.
This study can be performed for any asset on the balance sheet as of December 31st, 2019, and significantly reduces tax payment today. This money can also be applied to assist investors with the current COVID-19 environment.
