When is the Best Time for a Cost Segregation Study?

cost segregation study

If you have real estate or clients who own real estate, it’s important to know beneficial tax planning strategies to maximize your investments. One of the best tools to use is a cost segregation study! 

What is a Cost Segregation Study? 

Cost segregation studies are a strategic tax planning tool that is completed to maximize federal income tax depreciation deductions by identifying fixed assets and their costs. It allows for restaurant owners to take their property and have it be categorized into acquisition or construction costs and then applied to the appropriate IRS tax credit. Through this 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.


By taking advantage of the benefits a Cost Segregation Study can provide your business, the acceleration of depreciation can give massive tax benefits years sooner than expected. 

How Do I Know if I Qualify? 

Almost any property from any company or industry can benefit from a cost segregation study, but restaurants are ideal property candidates. National Tax Group has performed cost segregation studies for a variety of enterprises over the last 20 years and has saved our owners millions in tax incentives. 


Qualifying items that can be reallocated include:

  • Carpeting, vinyl, and epoxy flooring
  • Canopies and awnings
  • Kitchen equipment gas systems
  • Sound systems
  • Equipment related electrical and plumbing connections
  • Decorative light fixtures
  • Kitchen storage and preparation equipment


Cost Segregation is often most lucrative on properties that have spent over $1 Million on the property and its improvements. 

The Best Time to Perform a Cost Segregation 

A Cost Segregation study should be completed after the purchase, remodel, or construction of a property. Although, the best time for a study with new owners is during the year a building is constructed, purchased, or remodeled.


If you are thinking of performing a cost segregation study, give us a call today! Our team of Cost Segregation experts will give you a free assessment today to see if your properties qualify! With little work on your part, you could start 2020 off with more money to invest back into your business. 

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