Cost segregation is the tax planning strategy that allows investors to reclassify some assets, to shorten the depreciation cycle. Real estate investors leverage this powerful strategy in a variety of scenarios, helping to reduce their short-term tax liability and, as a result, freeing up cash flow. Most types of investment properties qualify for accelerated depreciation, as long as they fall within the federally established guidelines. Unfortunately, many investors fall under the misconception that residential properties – especially those with a lower cost basis – do not qualify for asset segregation, when in fact they do. Before you miss out on the significant benefits that you could realize from reclassifying investment property assets, let the experts at Cost Segregation Authority review the details of your property to determine its potential eligibility.
What Types of Properties Qualify for Accelerated Depreciation?Any investment property can qualify for cost segregation, including income-producing residential properties, as long as it falls within the following criteria:
- Located within the United States,
- Built or purchased after 1986, and
- Depreciable cost bases of $300,000 or more.