cost-segregation-analyzer

Cost segregation analysis quantifies accelerated depreciation by applying MACRS and bonus depreciation rules to categorized CRE components, then discounting the resulting tax savings to compute the present value.

Cost segregation adds value when the present value of upfront tax savings from accelerated depreciation outweighs the potential Section 1250 and 1245 recapture taxes at disposition. A breakeven hold period is calculated to determine the minimum holding time required.

Modeling cost segregation benefits requires the CRE acquisition price, land value, year placed in service, investor marginal tax rate, and hold period to accurately calculate depreciation and recapture scenarios.

Bonus depreciation increases the immediate expensing of qualified property components, which significantly raises the present value of early tax savings and shifts the breakeven hold period for the CRE asset.

Yes, sensitivity analysis models 1031 exchange scenarios alongside Section 1250 and 1245 recapture taxes at disposition to evaluate how deferring capital gains impacts the net present value of tax savings.

The breakeven hold period in MACRS depreciation analysis is the minimum time an investor must hold a CRE asset for the present value of accelerated tax savings to exceed future recapture costs.