What is the Difference Between Personal and Real Property?

What is the Difference Between Personal and Real Property?


What is the difference between personal and
real property? You might have heard the term reclassification
of personal property and accelerated depreciation of personal property as the core value of
a cost segregation study. So what is personal property? Personal property is defined by the IRS in
section 1245. It consists of non-structural components of a building, land improvements,
or improvements to a building considered an “integral part” of a business activity. The
personal property is allocated into 5, 7 or 15 year depreciable “buckets” and accelerated. Examples of 5 and 7 year components include:
Cabinets, Moldings, Flooring, and Building signage Examples of 15 year components include: Site
Drainage, parking lots, sidewalks, landscaping, and retaining walls. The remaining structural components of a building
are considered real property and defined in section 1250. These items are depreciated
on a straight line basis over 27.5 years if residential, and 39 years if Commercial. Call your CSS representative for a free estimate
of savings and consultative session

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