What is Cost Segregation?

Cost segregation is an IRS-approved method that allows us to:

• Break down real estate assets into depreciable components
• Accelerate depreciation on parts like flooring, fixtures, and HVAC
• Significantly reduce taxable income in the early years

Result:
More upfront tax deductions = more money in your pocket sooner.

Key Tax Advantages for Our Investors

• Bonus Depreciation

Under current tax laws (e.g., Section 168(k)), qualifying property improvements can be depreciated 100% in year one — giving major upfront deductions.

• Passive Loss Offsets

For many investors, depreciation losses can offset passive income (or in some cases active income, with proper qualifications).

• Deferred Tax Obligations

Reduced taxable income today often means deferring a significant portion of your tax burden — enabling more reinvestment and compounding.

How Nova Sky Applies Cost Segregation

We commission third-party engineering-based cost segregation studies on applicable properties across our portfolio.

These studies:

• Identify components for accelerated depreciation
• Ensure IRS compliance
• Are included as part of our investor reporting package

✅ You don’t have to do anything — we handle the complexity, and you enjoy the benefit.

Real-World Impact

Example Scenario:
An investor places $100,000 in a Nova Sky offering. Due to cost segregation and bonus depreciation, they may receive a $60,000–$80,000 K-1 loss in Year 1, which can help reduce their taxable income significantly.

Compliance & Transparency

All strategies are:

• CPA-reviewed
• IRS-compliant
• Backed by formal documentation included in your investor statements

We believe in doing it right — with precision, ethics, and investor-first thinking.