BIG TIME OPERATOR - COST SEGREGATION

I see cost segregation discussed a lot as if the main question is simply, “How much depreciation can I accelerate?”

That question makes sense, but it can be too narrow.

A study can be technically valid and still not be useful if the investor cannot use the losses, plans to sell soon, has limited remaining benefit, lacks audit support, or has not evaluated recapture and exit strategy.

The more useful operator question may be: “What decision changes if this deduction is created?”

If the answer is “nothing” or “not enough to justify the cost and risk,” the study may not be wrong. It may just be the wrong tool at that moment.

I wrote through that issue in Part 3 of our cost segregation series. It is less about whether cost segregation works and more about whether it fits the larger plan.