How is depreciation impacted under the Alternative Minimum Tax (AMT) system?
A. Generally, for improvements placed in service after 1998, personal property identified in a Cost Segregation Study will require depreciation to be calculated using a 150% declining balance method as opposed to the 200% declining balance method. Although the acceleration of depreciation is slower under the 150% declining balance, the benefits of a Cost Segregation Study are not impacted significantly since the recovery periods remain the same. For improvements placed in service before 1998, the calculations are more complex and benefits from a Cost Segregation Study are likely to be somewhat lower than originally anticipated.
