Completing cost segregation studies on condominiums purchased for residential rental purposes present unique challenges. Prior to beginning the study, our engineer needed to review all the purchase documentation to determine the specific assets included as part of the acquisition. In addition to the “walls-in” assets of the specific unit, the owner also acquires a shared portion of the building’s common areas and amenities. This property includes an indoor pool/jacuzzi, wellness spa, fitness center, screening room, resident’s lounge / library / aquarium, luxury lobby, and private dining/conference room with kitchen area. The fractional interest in these amenities contributed to overall purchase cost.
CRS reallocated a significant amount of the building assets to shorter depreciation periods, resulting in the following accelerated tax benefits and increased cash flow for the client.
