Property owners often look at a building as one complete investment. However, a closer look can show that a property contains many different assets, each serving a particular purpose. Understanding these components can help owners learn more about depreciation. This is where what is cost segregation becomes an important question for real estate investors.
What Is Cost Segregation?
Cost segregation is an approach that examines building components and identifies assets that may qualify for different depreciation categories. Instead of treating every part of a property as one broad building asset, the process considers individual components and their characteristics.
A building may include flooring, lighting, electrical installations, plumbing, equipment, landscaping, parking improvements, and specialized features. These components may have different functions and depreciation recovery periods. https://www.whatiscostsegregation.com/
