What is a Cost Segregation Study?
A cost segregation study (“CSS”) is defined as "an engineering-based study of all costs associated with the acquisition or construction of a building. The purpose of this study is to classify these costs as either real or personal property, with the personal property additions being depreciated on an accelerated basis."
Generally, these costs are assigned a 39-year depreciable life for tax purposes. However, through a cost segregation study, some of these costs may qualify for a 5, 7 or 15-year depreciable life, resulting in a savings of up to 22 cents on every dollar. Some of the properties that have been identified with the best potential include the following:
1. Restaurant Establishments.
2. Manufacturing Plants
3. Commercial Office Buildings
4. Retail Stores
5. Hotels, Motels and Other Hospitality Facilities
6. Shopping Malls and Strip Malls
7. Medical Facilities & Long Term Care Facilities