Cost Segregation Assistance
Real property is depreciated over 39 or 27.5 years versus personal property, which is depreciated over 3, 5, 7 and 15 years.
Do I Qualify?
All properties constructed, acquired, or renovated after 1986 qualify under the IRS guidelines. It can be a new building currently under construction; existing buildings undergoing remodeling, restoration or expansion; purchases of existing property constructed anytime, but placed in service after 1986; office / facility leasehold improvements on your current facility and “fit outs”.
How Can We Help?
We can help you organize your project information and costs so that your internal tax/accounting department or outside tax advisor can accurately determine what part of your project is real property and what part is personal. By doing this, it will optimize your tax savings and make it eaiser to complete the study and minimize your exposure to audit by the IRS.
What Are The Benefits?
By properly segregating costs, investors, CPA’s, appraisers, engineers, developers and consultants can accomplish a number of goals related to real estate investments:
- Significantly improved after tax cash flows from the project due to accelerated tax depreciation.
- Reduced real property taxes resulting from reclassifying assets as personal property.
- Increased state investment tax credits on manufacturing property.
- Opportunity to claim “catch-up” depreciation on future tax returns for corrections in tax depreciation. (No extension of the statute of limitations or amended returns required)