Is It Too Late for Cost Segregation? No, it is not too late to perform a Cost Segregation study, even if you bought the property years ago and never applied the strategy. This is possible through a process called a “Look-Back Study,” which allows you to catch up on all the missed depreciation in a single adjustment.
The Look-Back Study lets you apply all the accelerated deductions you would have taken in prior years to your current tax return without the hassle of amending prior years' returns. This flexibility makes Cost Segregation a valuable tool at almost any stage of property ownership, unlocking significant tax savings that you might have missed out on.
Look-Back Study: Catching Up on Depreciation
- Timing: It is not too late to do a Cost Segregation study, even if the property was purchased years ago.
- Method: The process is called a “Look-Back Study.”
- Benefit: Allows you to catch up on all missed depreciation from prior years.
- IRS Form: The missed depreciation is claimed as a single adjustment on your current tax return (using IRS Form 3115).
- Advantage: You avoid the need to amend prior tax returns, simplifying the process and immediately unlocking missed savings.
