Cost Segregation Update: Street Light Depreciation
By Roger Gingerich, Partner, Tax & Business Services
Based on a recent ruling, taxpayers can now recover the cost of all newly-installed street light assets more quickly than if they were classified as land improvements.
The Tax Court recently ruled that street lights may be depreciated over seven years for federal tax depreciation purposes. This decision was based on the ruling that typical street light assets, which include poles, light fixtures, mounting hardware, and bases that can be relocated, and met the six criteria set forth in Whiteco Industries, Inc. v. Commissioner, 65 T.C. 664 (1975), are not inherently permanent. Therefore, because they are “property without a class life” they may be depreciated over seven years.
Do you have questions about cost segregation? Contact your Marcum representative at (855) MARCUM1.