About Cost Segregation
Cost Segregation is a strategic tax savings 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.
In general, it is easy to identify furniture, fixtures, and equipment (FF&E) that are depreciated over 5 or 7 years for tax purposes. However, a Cost Segregation Study goes far beyond that by dissecting construction costs that are usually depreciated over 27 ½ or 39 years. The primary goal of a Cost Segregation Study is to identify all construction-related costs that can be depreciated over 5, 7 and 15 years.
For example, 20% to 50% of the total electrical costs in most buildings can qualify as personal property (depreciated over 5 or 7 years). Reducing tax lives results in accelerated depreciation deductions, a reduced tax liability, and increased cash flow.
What is involved in a Cost Segregation study?
A quality Cost Segregation Study evaluates all information including available records, inspections, and interviews, and presents the findings in a clear, well-documented format.
Our process for conducting a detailed Cost Segregation includes: A review of all cost detail for the property including but not limited to: the general contractor’s application for payment, construction invoices, change orders, depreciation schedules, and appraisals.
The ideal time for a Cost Segregation Study can vary depending on a client’s tax situation. At KBKG, our team of engineers and tax experts work together with clients and their accountants to recommend the best tax planning solution to fit their needs. A free preliminary analysis can help determine the right timing and strategy for any investor.
Cost Segregation Analysis
Please provide us with the following information, which will allow us to determine if your property will benefit from a Cost Segregation Study!
Cost Segregation Case Study
Walker Properties constructed a brand new office building in 2012. The new building has 60,000 square feet and a lot size of 220,000 square feet.
Results: Year one deductions of over $400,000. Year one increased cash flow of $170,000.
10 year sampling study with 125 locations
“Since our initial engagement with KBKG was a success, we now engage them to review our fixed asset reporting annually”
Big 5 Corporation
Cost Segregation Experts
Cost Segregation Webinars
Overview of Cost Segregation
Bonus Depreciation Update
Cost Segregation FAQs
What should I consider when selecting a cost segregation provider?
Will the company be available if I get audited by the IRS?
Does the company have tax experts that can help if my CPA has questions?
How long will it take to complete the study?
How much will a cost segregation study cost?
We are pleased to announce that we recently hired Eddie Price as the Director of our Cost Segregation department. Eddie has over 30 years of cost segregation experience dating back to the Investment Tax Credit period. He is a Certified member of the American Society …
PASADENA, CA – KBKG congratulates Gian Pazzia, CCSP on his recent election as President of the American Society of Cost Segregation Professionals (ASCSP).
“I’m looking forward to the opportunity to further develop and promote the American Society of Cost Segregation Professionals (ASCSP). With representation …
Summary: In the recently released Chief Counsel Memo #20125201F, the IRS makes it clear that even if you engage a third party to perform a cost segregation analysis, taxpayers cannot avoid penalties for aggressive positions taken in the