Save on Your Taxes with Cost Segregation

Cost Segregation is an engineering-based, tax savings tool to help companies reduce current income tax liabilities by accelerating depreciation deductions for qualifying components. It’s a strategy that should be considered by nearly every taxpayer who owns, is constructing, renovating, or acquiring real estate. By using an engineering-based approach to identify assets within a building that can be reclassified into shorter depreciation recovery periods than the building itself, significant tax savings can be achieved.

Generally, an entire building is classified with a straight-line depreciation cycle of either 39 years for commercial and industrial properties or 27.5 years for residential-rental properties. By applying a Cost Segregation Study, you can maximize your inherent tax benefits by identifying, classifying, and segregating the personal property components of the building. This results in accelerated depreciable lives of 5, 7, and 15 years, saving you thousands of tax dollars.