All About Cost Segregation by Eli Loenbenberg, CEO Download PDF

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Cost Segregation Glossary E


Eligible Assets

Eligible assets for cost segregation studies are generally assets, fixtures or related elements that are either unnecessary for the operation of the building itself or are temporary structures. They can include certain electrical/mechanical systems; redundant HVAC systems; decorative lighting or moldings; floor coverings; communication systems; distribution panels and wiring; and millwork, among many other assets.

Eligible Property

Real property eligible for cost segregation includes buildings that have been purchased, constructed, expanded or remodeled since 1987. All types of properties qualify for cost segregation. The average percentage that can be reallocated to shorter depreciation varies by type, with, for example, 25-50% average reallocation for hotels; 35-45% for manufacturing facilities; and 20 to 35% for medical/dental properties. A study is typically cost-effective for buildings purchased or remodeled at a cost greater than $500,000.

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