Decelerating Depreciation Rates

Be Aware Of

Under the Tax Cuts and Jobs Act (TCJA), bonus depreciation for personal property in non-residential buildings was set at 100% through 2022. Buildings placed into service by 12/31/22 are the last to receive this percentage.

In 2023, when a building is acquired, renovated, and placed into service, bonus depreciation will be reduced to 80%. And percentages will continue to decrease each year:

In 2024 it will drop to 60%

In 2025 it will drop to 40%

In 2026 it will drop to 20%

In 2027 and beyond it will be 0%

As you are working with your clients this tax season, encourage them to get buildings into service as quickly as they can in order to get the most out of a cost segregation study.

Cost Segregation Projected Re-class Percentages

The amount of personal property that can be re-classed during a Cost Segregation study varies by building type. Each building is unique, but these are average re-class percentages to give you an idea of which buildings are the best suited for a Cost Segregation study. If you or a client acquired, built or renovated a building like these, it is time to schedule a study.

Manufacturing // 30-60%

Auto Dealership // 20-30%

Restaurant // 20-30%

Apartment Complex // 15-25%

Senior Living Facility // 15-25%

Office Building // 5-20%

Call Us To Get Started: 877.410.5040

877.410.5040 // info@scarpelloconsulting.com

About Scarpello Consulting

Scarpello Consulting provides clients with a variety of cost-savings measures based on tax incentives and regulation such as Cost Segregation Studies and §45L Reports. Through a sister company, Scarpello Group, the team can provide clients with turn-key data analytics. In the years to come, both teams strive to create the answers to unique business problems, focusing on identifying break-through cost-savings measures that allow businesses to operate more efficiently.

LEARN MORE