Cost segregation is a valuable strategic tax planning tool that separates real property into various depreciable categories, and allows taxpayers to depreciate property over much shorter periods of time than the typical 39-year period. When you purchase a property, you acquire more than just a structure: you’ve gained a set of building components. While you may look at this as one piece of property, 20% to 40% of the building’s parts and pieces may be looked at differently by the IRS. While structures are normally depreciated over 39 years (27.5 years for residential), it’s possible that some components of your property can be depreciated over 5, 7 or 15 years. The objective of a cost segregation study is to allocate each of your property-related costs into their appropriate property classes in order to better calculate depreciation deductions. The idea is to analyze – and suitably separate – what’s part of the building, and what’s part of your business.