How Cost Segregation Can Turn Your Rental into a Cash Cow

Front loading your depreciation deductions to take them sooner

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Cost segregation breaks your real property into its components, some of which you can depreciate much faster than the typical 27.5 years for a residential rental or 39 years for nonresidential real estate.

When you buy real property, you typically break it into two assets for depreciation purposes:

• land, which is non-depreciable; and

• building (residential is 27.5-year property; nonresidential is 39-year property).

With a cost segregation study, you make your property much more than a building on land. Here’s what’s possible with a cost segregation study:

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