Does the IRS allow a Cost Segregation Study to be performed on buildings that were purchased, constructed or improved prior to this year?
Yes. A cost segregation study can be performed on any building that was purchased, constructed, or improved as far back as 1987. With the advent of Rev. Proc. 2002-19, “Catch-up” depreciation is recognized all in the first tax year affected by the study, no matter how much the change to income resulting. Prior to Rev. Proc. 2002-19, the “catch-up” depreciation was to be recognized on a prorated basis in four equal parts over the first four tax years, beginning with the first year affected by the study, or all in the first year if the “catch-up” depreciation was not greater than $25,000. This procedure requires an automatic application for change of accounting method (form 3115) to be filed in the first year affected by the study.
Related Questions
- Does the IRS allow a Cost Segregation Study to be performed on buildings that were purchased, constructed or improved prior to this year?
- What are the "Summary and Conclusions" of the IRS regarding Cost Segregation Study Methodologies?
- What if I don’t have the necessary materials? Can a cost segregation study still be performed?
