Minnesota · Cost segregation
Cost Segregation in Minnesota
Bonus add-back, recovered over time.
Minnesota requires adding back 80% of bonus depreciation for state purposes, then recovering it over 5 years. Your federal benefit is unchanged; the state benefit is deferred, not lost.
Minnesota at a glance
- Bonus-depreciation conformity
- Bonus add-back, recovered over time
- §179 treatment
- Conforms to the full federal §179 expensing limit
- §1250 recapture
- Recaptured as ordinary income at the state level
- Top individual rate
- 9.85%
- State return form
- Form M1
How cost segregation works
Cost segregation reclassifies parts of a building into shorter recovery classes (5-, 7-, and 15-year property) instead of depreciating everything over 27.5 or 39 years. That front-loads your deductions — and federal can let you write off much of the reclassified basis in year one. How much of that benefit also flows through at the state level depends on Minnesota’s conformity rules above.
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CostSegLogic is a software platform, not a CPA firm or law firm. Estimates and reports are informational only and are not tax, legal, or accounting advice. Consult a qualified tax advisor before filing.