Cost Segregation
We Are Here To Help You
Cost Segregation is a commonly used strategic tax planning tool that allows companies and individuals who have constructed, purchased, expanded or remodeled any kind of real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes.
What is a Cost Segregation Study & How Does it Work?
- Segregation of Property Cost into different components
- Primary objective is to depreciate some of the components over 5, 7 or 15 years
- Breakup helps in claiming deduction for loss on replacement/disposal
- Cost segregation for Ownership/Leasehold properties
When should a Cost Segregation study be conducted?
- Any time after purchase, remodel or construction of property
- However, if carried out at the time of construction helps in effective maintenance of records
What is Involved in a Cost Segregation Study?
- Evaluation of Information/records, inspections etc
- Review of Construction Invoices
- Maintaining proper documentation for any probable IRS scrutiny
- Physical Inspection of the Property
- Review of building design, blue prints etc and estimations where information is not available