A cost segregation study is a set of calculations created by an independent firm with extensive tax and construction knowledge. When an engineering-based study is performed, actual cost records and construction documents are reviewed, when available, and a site visit is completed.
A quality cost segregation study should include the 13 points outlined within U.S. tax code. Our methodical approach identifies individual components of your commercial property, which are included in your detailed cost segregation study.
Most buildings are depreciated over 27.5- or 39-years. A cost segregation study re-categorizes a portion of your building into 5-, 7- or 15-year class lives. When the usable lives of these items are accelerated, your income is reduced, thus, reducing your income taxes.
Within the first five years of building ownership, you could save up to $100,000 for every $1 million in building costs.