cost segregation review & testimonial

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

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.

Cost Segregation Benefits:

  • Generates immediate increase in cash flow through accelerated depreciation deductions.
  • Reduces income taxes and can also reduce real estate property taxes.
  • Provides an easy opportunity to claim ‘catch up’ depreciation on previously misclassified assets.
  • Provides an independent third-party analysis that will withstand IRS review.

 

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.
 
When should a Cost Segregation Study be conducted?

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.

  • Post-purchase, Remodel, or Construction: "Look-back" Cost Segregation Study: A Cost Segregation Study can be completed anytime after the purchase, remodel, or construction of a property.
  • Year Placed in Service: The optimum time for a Cost Segregation Study for new owners, is during the year a building is constructed, purchased, or remodeled.
  • Pre-construction: For investors who are in the planning phases of construction or remodeling, the best time to consider a Cost Segregation Study is before the infrastructure of the building is set.