5 common misconceptions about cost segregation
Cost segregation has long been a valuable tax planning tool that allows taxpayers to take accelerated deductions for their real estate investments. But cost seg can be more complex than you think, depending on who owns the asset, how the property reports revenue, the nature of repairs and improvements made, and the depreciation time frame desired.
Mistakes can be very costly in the long run. Take the time to get the facts right. You’ll be glad you did.
Rarely a week goes by when we don’t see a published article or broadcast clip with misleading observations and recommendations about depreciation of residential vs. nonresidential real estate. And, don’t get me started on the confusing treatment of qualified improvement property (QIP) and proper use of bonus depreciation.
There are five major issues and misconceptions I see time and time again. Let’s unpack them one at a time: