What is Cost Segregation?
Cost Segregation is a commonly used strategic tax planning 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.
What is a Cost Segregation Study & How Does it Work?
When a property is purchased, not only does it include a building structure, but it also includes all of its interior and exterior components. On average, 20% to 40% of those components fall into tax categories that can be written off much quicker than the building structure. A Cost Segregation study dissects the construction cost or purchase price of the property that would otherwise be depreciated over 27 ½ or 39 years. The primary goal of a Cost Segregation study is to identify all property-related costs that can be depreciated over 5, 7 and 15 years.
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What are the Benefits of Cost Segregation?
Many business owners are surprised to learn of the compelling tax savings a cost segregation study offers. Below is a list of three of the most prominent benefits.
Cash Flow
Generates immediate increase in cash flow through accelerated depreciation tax deductions
Write Off
Quantifies property’s major components and leasehold improvements so they can be written off when replaced or renovated
Review
Provides an independent third-party analysis that will withstand IRS review.
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KBKG Cost Segregation professionals have performed thousands of projects resulting in hundreds of millions of dollars in benefits for our clients across the US.
Please see below for a partial list of our cost segregation clients. Let us know if you would like to see a comprehensive list.
