Frequently Asked Questions

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When property owners acquire, build, or remodel their real estate assets, they typically depreciate the entire project over 27.5 years (residential) or 39 years (non-residential). A cost segregation study identifies certain components of the facility to depreciate over shorter tax lives (typically 5, 7, or 15 years), accelerating the timing of depreciation and can significantly reduce the current tax burden.

Varies by property type, but typically $1,000,000 for acquired property and $500,000 for constructed or remodeled property are the baselines where the tax benefit makes sense. DW Cost Seg provides a feasibility analysis (at no cost!) to give the investor a fee to benefit ratio before engaging in a study. Studies may be performed for prior tax years, not just the current tax year. 

Derek has performed cost segregation studies on just about every type of property? Apartments, office, retail, medical, industrial, even golf courses and sports stadiums! Reclassification percentages vary by property type, anywhere from 10% to 40% reclassified to short-life property.