Many commercial property owners do not realize that cost segregation can be applied to existing property...
...as long as the property/renovation/improvement was placed into service or purchased after December 31, 1986. Any additional depreciation not taken in the previous years can be deducted in the year of the study.
Building owner must have a US Federal tax liability, “for profit” entities only.
Any building or facility renovated, added onto or remodeled after 1986.
Any Lease Hold Improvement on a commercial property.
The taxpayer must plan on retaining the property for the next few years and have net income that is currently taxable.
For taxpayers who are embarking on a new construction project, cost segregation is an especially timely topic, thanks to the Jobs and Growth Tax Act of 2003, which increased bonus depreciation on personal property in the first year from 30% to 50% for property acquired after May 5, 2003 and before January 1, 2005.
