By John J. Cummings, JD

Alright, so you just bought or built a commercial property. Maybe it’s a 70-room hotel or a 5-star resort or even an enormous office complex. Whether you spent $5 million or $500 million, chances are really good that you need to do a proper cost segregation study to ensure maximum and optimal acceleration of depreciation (maximum up front tax deductions and saving). You already know this in theory. But, depending on the type of property you’re depreciating, you may not realize that you are also throwing money away if you don’t properly segregate the assets within that building for future renovations and abandonment deductions that result from those renovations. Additionally, accelerating tax deductions without proper support could put you in the penalty box with the IRS, when it’s easy to avoid that trap.

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