Cost Segregation & Accelerated Depreciation on NNN Properties
A cost segregation study may change the timing of eligible depreciation deductions. Results depend on the property, tax basis, current law, and your ability to use deductions. We help coordinate property acquisition as your broker alongside your independent tax and study professionals.
Your tax advisers determine eligibility, deductions, and any usable tax effect.
Four Tax Strategies for NNN Investors
These are topics to review with your independent tax advisers, not guaranteed benefits or tax services provided by our brokerage.
Cost Segregation on New Construction
Ask a qualified study provider to examine component documentation, ownership of improvements, and depreciable basis. New construction does not establish a deduction amount.
Bonus Depreciation Eligibility
Your tax advisers should verify current law, eligible assets, placed-in-service dates, elections, and state conformity before modeling deductions.
1031 Exchange + Cost Segregation
An exchange changes tax-basis and depreciation questions. Coordinate with your QI and tax advisers before applying a study to a replacement property.
Depreciation Recapture Planning
Accelerated deductions may affect later recapture and disposition treatment. Your tax advisers should model the hold period and possible sale or exchange outcomes.
NNN vs. Multifamily — Questions for Your Study Provider
Property type alone does not determine depreciation deductions. Compare ownership of improvements, land allocation, component documentation, and placed-in-service dates for each acquisition.
Compare the Actual Property
A tenant brand or asset category does not establish a tax result.
Your independent tax advisers and qualified study provider should evaluate the actual acquisition and your circumstances.
Cost Segregation FAQ
What is cost segregation?
A cost segregation study evaluates whether eligible property components belong in shorter depreciation recovery periods. Classification, depreciable basis, current law, and deduction usability require review by qualified study professionals and your tax advisers.
How does cost segregation apply to NNN properties?
A study may be relevant when the investor owns depreciable improvements. Land is not depreciable, and a ground-lease purchase may involve a different asset basis. Your study provider and tax advisers should determine the eligible components and whether any deductions can be used.
What is bonus depreciation and how does it differ?
Bonus depreciation concerns the timing of deductions for eligible assets. Applicable percentages, acquisition and placed-in-service dates, elections, and federal and state conformity must be checked under current law by your tax advisers. A study does not promise a particular deduction.
Does cost segregation work for 1031 exchange buyers?
Both topics may be relevant, but an exchange affects the replacement property's tax basis and depreciation treatment. Your qualified intermediary and tax advisers should confirm eligibility, basis allocation, and deduction usability. No combined tax outcome is guaranteed.
Are there passive activity limitations I should know about?
Passive-activity, at-risk, basis, and other rules can limit deductions. Real-estate-professional status involves multiple requirements, not merely an hours threshold. Your tax advisers should evaluate your circumstances; our role is property brokerage and acquisition coordination.
How much does a cost segregation study cost?
Obtain a property-specific quote from a qualified study provider. Scope, documentation, complexity, and support vary. Ask your tax advisers whether the expected timing of usable deductions justifies the study's cost before commissioning it.
What NNN property types benefit most from cost segregation?
New construction may provide clearer component documentation, while existing buildings may also merit evaluation. Ownership of improvements, land allocation, actual construction costs, and your tax circumstances matter more than a tenant's brand name.
Plan Your NNN Acquisition With the Right Team
Discuss your investment criteria and property search with us as your broker. Coordinate tax-basis and study questions with your independent tax advisers.
Discuss Your NNN Property Search