Cost Segregation Accelerates Depreciation Deductions

Helping real estate owners and tenants accelerate depreciation deductions.


Tax code changes can be complicated and overwhelming.
You shouldn’t have to be an expert in the law to be able to take advantage of it.


What is Cost Segregation?

Cost segregation is a tax planning strategy that can help real estate owners and tenants to accelerate depreciation deductions. Although standard depreciation occurs over a lengthy 39-year period, many assets within a structure–from plumbing and electrical fixtures to flooring–are not designed to last that long.

The ability to break out such assets for a five-year, seven-year, or 15-year recovery period helps accelerate depreciation, defer taxes, and improve cash flow.


It’s time to invest in an engineering-driven cost segregation study.

An engineering-driven cost segregation study can be useful at any point in the real estate cycle. Whether a property has been newly constructed, recently acquired, or undergone renovations or tenant improvements, a cost segregation study is likely to be a valuable depreciation tool. In certain cases, a look-back study can be appropriate.

Bottom line: If you own your building or if you’ve made improvements (as an owner OR a tenant), you may benefit from a cost segregation study.



Benefits of leveraging cost segregation

A detailed, high-quality engineering analysis will provide the documentation that’s essential for accelerating depreciation. It’s important to remember that a cost segregation study isn’t generating “new” deductions. Rather, it’s speeding up your ability to claim deductions. In many cases, a cost segregation study can help you accelerate the recovery period for 20% to 40% (or more) of your depreciable cost basis.

Businesses routinely write off adjusted basis when they retire fixed assets. Yet, many neglect to apply that same strategy to what is often their most significant fixed asset: their real estate. In many cases, the reason is that they simply lack the cost details that are required to properly leverage this tax strategy.

Services for CPAs

In the face of growing tax code complexity, it’s almost impossible to cover every area with in-house resources. For expertise in understanding and applying the myriad of complexities with the Tangible Property regulations and other IRS Code impacting commercial real estate, turn to Capstan Tax Strategies.

Services for Business Owners

Accelerating depreciation has long been a strategy employed by real estate owners to take advantage of immediate tax savings. The Tangible Property Regulations and the recent Tax Cuts and Jobs Act has created significant opportunities that elevate the many uses of Cost Segregation Studies. Learn how Capstan can help.

Schedule a Call with Us Today

Getting started is simple. Whether you’re an accounting firm or own/lease commercial real estate, contact Capstan for a free consultation. We will assess your needs.

Our Office

Capstan Tax Strategies
200 Dryden Road
Suite 3400
Dresher, PA 19025

Contact Us


Covid-19 Update