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Cost segregation studies are a strategic tax planning tool that is completed in order to maximize federal income tax depreciation deductions by identifying fixed assets and their costs.
This engineering-based study gives you an exact tax plan to accelerate property depreciation and helps cut your costs on any real estate that has been constructed, remodeled or purchased. It allows for real and personal property to be categorized into acquisition/construction costs and then applied to the appropriate IRS tax credit.
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How Does Cost Segregation Work?
Through a cost segregation study, properties can be reclassified from a standard 39-year depreciable life to a 5, 7, or 15-year depreciable life, which enhances federal tax credit savings, and improves cash flow. Building and property owners are also able to retrieve missed deductions from previous years.
Who Qualifies for a Cost Segregation Study?
Almost any property from any company or industry can benefit from a cost segregation study. National Tax Group has performed cost segregation studies for a variety of industries over the last 20 years and have saved our clients millions in tax incentives. If your business owns property, chances are you can increase your cash flow with this tool.
Which Industries Can Benefit for a Cost Segregation Study?
Businesses like restaurants, hotels, apartment buildings, and commercial property have the most to gain from a cost segregation study. These businesses typically have the most lucrative outcomes from utilizing this tax tool.
We Help Owners From All Industries
There are many projects that business owners, companies, and individuals can do in order to speed up depreciation deductions.
A property is eligible for a cost segregation study at any time before, during and after a remodel or construction of a property. Through our experience, National Tax Group recommends that the ideal time to complete a study is during the first year a building is constructed, purchased or remodeled. However, a cost segregation can almost always benefit a building owner. For those who are in the works with an architect and are planning a construction or remodeling, the best time to perform a study with us is before the building is set.
Our analysts and accountants will thoroughly evaluate your assets. Then a licensed deduction calculator is used to identify assets that will be segregated. Once the site visitation procedure is complete, the study will take up to 4 weeks to complete.
Why choose National Tax Group’s Cost Segregation Services?
With the combined expertise of engineers, construction specialists, and accounting professionals, we can handle complex and time-sensitive cost segregation studies. Our main objective is to facilitate maximum tax savings and improve cash flow.
Projects that are ideal for Cost Segregation Studies include:
- The construction of new buildings
- The renovation or expansion of existing buildings
- The purchase of a building
- The renovation of a leased building
How do Cost Segregation Studies work?
- On-site auditing
- Documentation as per
- IRS guidelines
- Tax deduction strategies
- Appropriate allocation of all indirect costs
- Identifying substantial amounts of accelerated depreciation
- KPI measurement
- Legal compliance
- Final reports for easy-to-use data for tax planning
For federal income tax purposes, building costs are classified into 3 main types:
- Tangible property
- Land improvements
- Real property