Cost Segregation
What is Cost Segregation?
Cost segregation is a tax-deferral strategy that accelerates depreciation deductions on certain components of a property. Instead of depreciating an entire building over 27.5 or 39 years, cost segregation allows you to identify and reclassify qualifying assets, such as flooring, lighting, and landscaping, into shorter depreciation categories like 5, 7, or 15 years. This results in significantly increased deductions in the early years of property ownership.
In today’s fast-paced economy, maximizing tax efficiency isn’t just an advantage—it’s essential. Businesses that leverage cost segregation strategies gain a powerful financial edge, optimizing cash flow and accelerating growth. Cost segregation, recognized by the IRS, is a strategic tool that allows property owners to reallocate asset costs, significantly reducing tax liabilities. More than just a tax benefit, it’s a proactive approach to reinvesting in expansion, enhancing profitability, and strengthening long-term financial stability.
Accelerating 5 & 15 year “Personal Property” can create a windfall in bonus depreciation and cash flow!! We are the #1 experts utilizing engineering studies to have saved our clients over $55 Billion with 48K+ studies in all 50 States.
Why Choose Cost Segregation?
01
Immediate Cash Flow Boost
Accelerated depreciation means more money in your pocket now, enabling you to reinvest in growth opportunities.
02
Tax Liability Reduction
Lower your taxable income by taking advantage of front-loaded deductions.
03
Comprehensive Property Analysis
Our team of experts conducts a thorough review of your property, ensuring you capture every eligible tax benefit.
Who Can Benefit?
Cost segregation is ideal for owners of commercial and residential rental properties with a cost basis of $300K and up:
Industrial Facilities
Office Buildings
Hotels and Resorts
Retail Spaces
Short Term Rentals
Why Partner with Us?
Our experienced team combines engineering expertise with tax knowledge to deliver tailored cost segregation studies that maximize your savings. We handle complex analysis and documentation, so you can focus on managing your investments. We have saved our clients OVER $55B in the last 30 years. We will defend our study before IRS with no additional charges. We have never had a finding by the IRS. We do not charge extra for site visits. Many companies do.
-
"It’s too complicated and not worth the hassle."A reputable cost segregation provider handles the entire process, making it seamless for you. You only need to provide the necessary documents (e.g., purchase details, construction costs). Most of the work happens behind the scenes, and the benefits—substantial tax savings and improved cash flow—are worth the minimal effort required.
-
"I’m worried about recapture taxes when I sell."While depreciation recapture does occur upon sale, the present-value benefits of accelerating depreciation outweigh the recapture costs in most cases. Plus, recapture taxes are typically at a 25% rate, which is often less than the benefit of the initial tax savings. Additionally, you can explore strategies like 1031 exchanges to defer taxes further. If you are looking at generational wealth and succession, when you pass, depreciation recapture and capital gains go away.
-
"It’s only for large properties or wealthy investors."Even if you don’t plan to hold the property long-term, accelerated depreciation reduces taxable income now, freeing up cash flow immediately. This increased cash can be used for other investments or to improve liquidity. Additionally, the "catch-up" depreciation rule allows you to claim missed depreciation retroactively without amending past returns. The time value of money (TVM) surmises that money is worth more now than at a future date based on its earning potential. Because money can grow when invested, any delay is a lost opportunity for growth. The time value of money is a core financial principle known as the present discounted value.
-
"I don’t want to deal with the paperwork."My professional cost segregation team will handle all the analysis, documentation, and reporting. You’ll receive a detailed report that your CPA can easily incorporate into your tax return. It’s designed to minimize your involvement while maximizing benefits. If you have other objections you'd like to address,
-
"I don’t plan to hold the property for long, so it’s not worth it."Even if you don’t plan to hold the property long-term, accelerated depreciation reduces taxable income now, freeing up cash flow immediately. This increased cash can be used for other investments or to improve liquidity. Additionally, the "catch-up" depreciation rule allows you to claim missed depreciation retroactively without amending past returns. The time value of money (TVM) surmises that money is worth more now than at a future date based on its earning potential. Because money can grow when invested, any delay is a lost opportunity for growth. The time value of money is a core financial principle known as the present discounted value.
-
"Cost segregation is too expensive to justify."While there is an upfront cost to performing a cost segregation study, the return on investment (ROI) typically far outweighs the cost. On average, the tax savings generated can be 10 to 20 times the cost of the study. Additionally, the study’s cost is usually tax-deductible, which further reduces its impact.
-
"My CPA already handles depreciation."While many CPAs handle general depreciation schedules, cost segregation requires specialized knowledge of tax laws, engineering, and construction. A dedicated cost segregation study often uncovers opportunities for accelerated depreciation that a standard approach might overlook. Your CPA can then incorporate the results into your tax filings. We can deliver 35-50% more tax savings.
-
"It sounds like a gray area of the tax code."Cost segregation is firmly supported by IRS guidelines and case law. When performed by experienced professionals who follow these guidelines, it’s a clear and legitimate tax strategy. The IRS recognizes cost segregation as an appropriate method for allocating costs between real and personal property.
-
"The IRS will audit me if I do this."Cost segregation is a legitimate and widely accepted tax strategy when performed correctly. The IRS has published guidelines (e.g., IRS Audit Techniques Guide) on cost segregation studies. By working with qualified professionals who follow these guidelines, you minimize audit risk and ensure compliance. With over 45,000 - 100% IRS compliant studies we defend at no additional costs.
-
"My property is too new; I don’t need this yet."The earlier you perform a cost segregation study; the sooner you can realize the tax benefits. Performing a study in the first year of ownership maximizes your accelerated depreciation, improving cash flow right away. However, even older properties can benefit through catch-up depreciation. I saved an owner $140K on a building he has owned for 20 years.
Clearing Up Common Misconceptions
Are you a property owner looking to enhance your cash flow and reduce tax liabilities?
Cost segregation may be the solution you need. By leveraging this powerful tax strategy, you can unlock substantial savings and reinvest in your business or property portfolio. Click the button below to request a FREE preliminary analysis!