A Cost Segregation Study (CSS) is an engineering based report of the costs pertaining to a real estate improvement. The purpose of a CSS is to take advantage of accelerated depreciation tax deductions which provide immediate cash savings through a lower tax liability. This detailed report will allow the property owner to allocate an average of 20-40% of the property’s improvement value to asset classes with accelerated depreciation.

Generally, commercial buildings must be depreciated over 39 years and residential buildings over 27.5 years. With a CSS, owners have the ability to reclass a portion of asset costs to the following year classes: 5 years, 15 years, 17 years or 20 years, allowing an owner to reap depreciation benefits much quicker than the standard timeframe.