Maximize Your Real Estate Investment Returns with Cost Segregation Expertise

We’ve saved real estate professionals millions through cost segregation studies. 

What Is Cost Segregation?

Cost Segregation is an application by which commercial property owners can accelerate depreciation and reduce the amount of taxes owed.

A cost segregation study is a federal income tax tool that increases your near-term cash flow in the form of a tax deferral. In a study, the parts of your building that qualify for shorter recovery periods are identified, quantified, and classified to produce additional depreciation deductions which reduce the amount of taxes owed.
Commercial building and income property owners have used cost segregation studies for years. These studies have resulted in advantageous depreciation deductions for taxpayers and have become a common method of depreciation.

We provide cost segregation services to commercial property owners so they can significantly increase their cash flow.

The benefits of getting cost segregation services

An immediate increase
in cash flow

A reduction in current
tax liability

The deferral of taxes

The ability to reclaim missed depreciation deductions from prior years (without having to amend tax returns).

Cost Segregation Services -Three Simple Steps To Stop Overpaying Income Taxes

Step 1: Analyze

Request your complimentary Property Analysis. This is a preliminary review that includes:

  • Increased cash flow analysis
  • Net present value of the savings
  • An associated cost and simple process outline to complete the study

Step 2: Review

  • Consult with you and your tax professional regarding your tax savings
  • Evaluate the building’s construction costs by component and building systems
  • Review all construction documents, including blue prints, as-built drawings, demolition plans, and available project specifications
  • On-site inspection and walk-through to photographically document building components, systems, site improvements, and any renovations

Step 3: Complete

  • Reclassifying each building component into more appropriate tax lives as prescribed by tax code guidelines
  • Allocating indirect costs to each asset
  • Delivering a written report with the asset detail supporting the reclassification and completion of the necessary tax forms
  • Assisting your tax professional in the completion of all applicable tax forms

Case Studies

$105,578 Annual Savings Target

$105,578 annual savings for an educational institute from savings in Supplies, Utilities and Insurance.

$1,010,975 Annual Savings Target

$1,010,975 annual savings for a construction company from savings in Supplies, Equipment, Utilities and Telecommunications

$135,345 Annual Savings Target

$135,345 annual savings for a telecom company

Cost Segregation FAQs

Cost segregation involves identifying and reclassifying components of a commercial property to accelerate depreciation for tax purposes. This process typically includes a thorough analysis of the property’s construction costs, separating them into shorter-lived assets such as equipment, fixtures, and finishes. By reclassifying these components, property owners can take advantage of accelerated depreciation deductions, leading to significant tax savings and increased cash flow.

Cost segregation studies involve a detailed examination of a commercial property’s components to identify assets that can be depreciated over shorter time frames. Typically conducted by experienced engineers or specialists, these studies involve analyzing construction documents, conducting site inspections, and utilizing specialized software to accurately allocate costs to different categories. The result is a comprehensive report outlining the reclassified assets and their associated depreciation schedules, which can then be used to optimize tax benefits for the property owner.

The cost of a cost segregation study varies depending on factors such as the size and complexity of the property, as well as the expertise of the firm conducting the study. Generally, costs range from a few thousand to tens of thousands of dollars. While this initial expense may seem significant, the potential tax savings and increased cash flow resulting from accelerated depreciation can often far outweigh the study’s cost in the long run, making it a wise investment for many real estate investors.

The duration of a cost segregation study depends on factors such as the size and complexity of the property, the availability of documentation, and the efficiency of the firm conducting the study. Typically, a thorough cost segregation study can take anywhere from a few weeks to a few months to complete. However, some firms offer expedited services for clients with urgent timelines. It’s essential to work with a reputable firm that can provide a realistic timeline based on your specific needs and circumstances.

For many real estate investors, cost segregation is highly worth it due to the significant tax savings and increased cash flow it can generate. By accelerating depreciation deductions, cost segregation can provide immediate tax benefits, allowing property owners to reinvest savings into their properties or expand their portfolios. Additionally, cost segregation can improve return on investment by optimizing tax efficiency and maximizing cash flow over the property’s life cycle. While there are upfront costs associated with a cost segregation study, the potential long-term benefits often make it a valuable investment for savvy real estate investors.

 
 

Cost Segregation Resources

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