Cost Segregation is a process of identifying real-estate property or building components that will generate accelerated depreciation deductions and deferring federal taxes. The goal of cost segregation analysis is to segregate assets into distinct class categories including personal property, land improvements, and structural components.
Cost Segregation is a process of identifying real-estate property or building components that will generate accelerated depreciation deductions and deferring federal taxes. The goal of cost segregation analysis is to segregate assets into distinct class categories including personal property, land improvements, and structural components.
If you’re an individual, company, developer or a commercial real estate owner, you may want to reduce taxable income or get maximum tax deductions. We provide solutions by conducting a cost segregation study that helps you uncover possible tax income savings. When depreciation is optimized using accelerated methods, you can free up substantial cash flow year after year. Overstating the amount of a 39-year real property when acquiring, renovating or building a real estate property can result in limited depreciation deductions that are available during the early stages of investments.
We conduct cost segregation analysis by using our engineering-based study and accounting expertise to determine whether your property and its assets fall into tax categories such as personal property and land improvements that can be depreciated into 5, 7, or 15 years instead of a normal scale of 27.5 to 39 years depreciable life.
By identifying your property components and reclassifying those assets, you can generate an immediate tax depreciation deduction in the current tax year, tax deferrals, significant cash flow benefits from real estate operations, and an opportunity to redeem depreciation deductions in preceding years.