Cost Segregation Bonus Depreciation
Cost Segregation Bonus Depreciation is a tax strategy property owners use to accelerate depreciation on certain parts of a building.
It has two parts. Through cost segregation, property owners identify components like floors and lighting that can depreciate faster than the building.
Next, with bonus depreciation, owners can deduct a large percentage of the segregated components. The main purpose of cost segregation bonus depreciation is to lower taxable income in the first year.
For instance, if you buy a building for $1 million, you can use cost segregation and bonus depreciation to write off $200K in the first year.
