Cost segregation is the process of segregating building costs between real and tangible personal property for tax deprecation purposes. Building costs include any cost related to new building construction, building acquisition, building renovation, leasehold improvements, building expansion, and building remodel.
If you’re a commercial real estate owner or developer, you don’t want to be overpaying your taxes. We may have a solution, and that is to conduct a cost segregation study.
When we do your cost segregation study, we’ll use our engineering and accounting expertise to identify building costs that may have been classified as subject to a 39-year depreciable life that can instead be classified as personal property or land improvements, with a 5-, 7-, or 15-year rate of depreciation using accelerated methods.
This reclassification will deliver a reduction in tax liability, deferral of taxes, an increase in cash flow, and an opportunity to reclaim depreciation deductions that may have been missed in prior years.