Cost Segregation Studies can potentially save property owners thousands of dollars over multiple years. The savings come through properly allocating costs between real property and personal property for tax depreciation.
A cost segregation study is an analysis of the capital expenditures or investment made in a residential or commercial building, such as a manufacturing facility, apartment building, restaurant, medical office, retail store or office building.
Why Conduct a Cost Segregation Study?
Direct benefits of cost segregation studies include:
- Reduce corporate and individual income taxes
- Reduce real estate taxes by shifting value from real property to personal property
- Reduce personal property taxes by accelerating the write-down of personal property
- Increase corporate after tax net income by reducing the corporation’s effective tax rate
- Help provide corporations and investors with increased cash flow
- Help investors maximize the tax credits they can claim
- Provide investors with additional cash to reinvest in new projects
- Allow a corporation or investor to claim "catch-up" depreciation on assets that have been previously misclassified as real property
- Help investors and corporations manage their investments in capitalized assets