Taxpayers are typically correct in depreciating personal property such as equipment and furniture over ﬁve or seven years, but they often neglect available federal and state tax beneﬁts by erroneously depreciating their entire investment in constructing or acquiring a building over 39 years. A cost segregation analysis identiﬁes speciﬁc building related assets that also qualify for shorter federal tax depreciation lives potentially creating signiﬁcant increased cash ﬂow beneﬁts.
Performance of a cost segregation study will reduce federal and state income taxes in the early years of a building’s life by accelerating tax depreciation deductions, resulting in increased current cash ﬂow. As part of the cost segregation process, we identify the net present value of the increased cash ﬂow over the life of the facility to ensure there will be a cost beneﬁt to the client. Our conclusions are based on sound tax principles and are supported by IRS regulations, rulings and case law. Our team is highly qualiﬁed to identify opportunities for federal and state tax advantages for owners of commercial, industrial, and rental real estate.
A COST SEGREGATION STUDY SHOULD BE CONSIDERED IF YOU ARE:
- Constructing a new building
- Purchasing an existing building
- Undergoing a renovation or expansion
- Constructing leasehold improvements