Cost Segregation for Property Owners

Engineering based cost segregation studies permit commercial real estate owners to reclassify real property for depreciation purposes and reclassify it as more rapidly depreciating personal property.

Challenges Facing Commercial Property Owners

As commercial property owners, you are already aware that commercial property is sensitive to changes in the economy. With recent world events, you may also be facing unexpected drops in revenue.

On top of that, if you are a single-purpose entity that owns commercial property, you have an additional concern to consider; the safety of your employees and how that concern impacts your workspaces, meeting rooms, and common areas. These necessary updates will have an impact on your bottom line as well.

It is more important than ever to perform a cost segregation study to see if you can keep a good portion of your tax dollars, money that can help cover updates or carry your business through any economic downturn.

An average Cost Segregation Study offers approximately $150,000 in additional depreciation per $1 million dollars in purchase or construction cost over the normal 39 year straight line method.

What Does Cost Segregation Mean For Commercial Property Owners?

Reclassification of real property results in significant cash flow benefits in both present and future years through considerably shorter depreciable tax life and accelerated depreciation methods.

Average reclassification percentage recaptured with an Engineering-Based Cost Segregation Study.

  • Auto-Car Dealership (29-35%)
  • Conference Center (25-35%)
  • Grocery Store (20-45%)
  • Hotels (20-40%)
  • Leasehold Improvements (20-80%)
  • Manufacturing (20-40%)
  • Office Building (20-30%)
  • Research Facility (22-45%)
  • Resort (25-45%)
  • Restaurant (20-80%)
  • Retail Strip Mall (18-40%)
  • Theme Park (16-22%)
  • Warehouse (20-30%)
  • Winery (18-45%)

Who Qualifies for Cost Segregation?

  • Any commercial property owner who has done the following since 1987
  • Purchased a commercial building or facility
  • Constructed a new commercial building
  • Renovated, remodeled, restored or expanded an existing facility
  • Paid for facility leasehold improvements

Our Cost Segregation Methodology

Our team of highly qualified professionals adhere to the IRS recognized Detailed Engineering Approach to perform all Cost Segregation Studies. The methodology has evolved from processes used in the 1970s and 1980s and adjusted in the late 1990s to complete investment tax credit studies. This approach maximizes the benefits and assures that IRS guidelines are followed.

 

In 2004 the IRS released the Audit & Technique Guideline, making clear the expected process of performing a successful Cost Segregation Study. These guidelines opened the doors for many small and midsize companies to begin taking advantage of what was previously only pursued by larger companies.

Improve your working capital and request more information on our cost segregation studies.

Or if you are ready to get started select a time for our initial 30 minute analysis by clicking here.

 

Or Call us at 1-800-488-5798