Cost Segregation Basics Cost segregation is an alternate method of depreciation in which pieces of a property are classified into separate categories for tax purposes. Instead of applying a typical 39-year depreciation cycle on the entire property and its contents, Cost Segregation allows some asset classes to be depreciated faster, resulting in near-term tax savings.
Our first study using Echo was on a building that was purchased in 2012 for $350,000. The additional depreciation deduction in 2014 was $31,000 and we were able to do a late partial asset disposition for an additional deduction of $23,000. We now have detail on all of the components of the building to comply with the Tangible Property Regulations.
Echo is a cost effective and streamlined approach to doing a Cost Segregation study and saving our client’s tax dollars.
Mike Bosen, CPAPartner | Gallacher, Bosen & Goodman PLLC