A commercial property can contain many different asset groups, yet depreciation is often discussed as if the building were a single item. Cost segregation takes a more detailed approach by examining individual components and assigning eligible assets to appropriate recovery periods. This creates a depreciation schedule that gives the tax professional more property-specific information to consider.
The Cost Segregation IRS website explains that the IRS Audit Techniques Guide for cost segregation focuses on using the correct method and proper recovery period for each asset. That concept is central to a well-supported study. The analysis should identify the property components, explain their classifications, and retain documentation that connects the conclusions to the actual building.
People searching for a cost segregation study IRS resource may also want to understand how the Tax Cuts and Jobs Act affected depreciation. https://www.costsegregationirs.com/
