Cost Segregation Studies
We work with many of our real estate clients to engage engineering services companies that can perform cost segregation studies of their real estate assets. These studies look at the components of a property to determine the proper depreciation life of the assets. A component with a shorter depreciation life is advantageous because it increases the depreciation expense in early years and in so doing, reduces taxable income of the entity. As your accountants, we can help coordinate and interpret the engineers’ findings and reports.
Cost segregation studies can be performed on new or existing construction as well as at the time of purchase or construction, or even after years of ownership. If the study is performed after years of ownership, we can assist you in making a “catch up” deductions on your taxes in the year the study is performed, thereby reaping tax benefits for the years in which the depreciation lives may have been longer.
If you would like more information about cost segregation studies, please give us a call.