Definition
An engineering-based study that reclassifies building components into shorter depreciation lives to accelerate deductions.
Example
The study moved $340,000 of a $1.6 million basis into 5, 7, and 15-year property.
Related terms
- Adjusted Basis
- Assessed Value
- Depreciation
- Depreciation Recapture
- Exchange Accommodation Titleholder
- Homestead Exemption
Frequently asked questions
What does Cost Segregation mean in real estate?
An engineering-based study that reclassifies building components into shorter depreciation lives to accelerate deductions.
How is Cost Segregation used in practice?
The study moved $340,000 of a $1.6 million basis into 5, 7, and 15-year property.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.