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Cost Segregation of a 78,000 Sq Ft Medical Building
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The U.S. formerly allowed depreciation of business real property in 15 years, but in 1993 depreciation changed to 39 years, almost three times as long! Cost Segregation was commercial real estate’s answer to excessive long term depreciation. Legalized in 1997, Cost Segregation is the reclassification of many building components to make them depreciable in five, seven or fifteen years. Without Cost Segregation, the entire building is depreciated over 39 years, but with Cost Segregation up to 50% of the cost is depreciated faster.

 

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