WHAT IS COST SEGREGATION?

The benefits of a cost segregation study (CSS) are undeniable. Use of the cost segregation practice is a tremendously beneficial and widely used tax strategy for residential development and commercial property owners. This technique can significantly reduce taxable income, which in turn increases cash flow - formerly a tool used by the largest accounting firms and real estate owners, it has become routine among almost every size businesses! Almost every person who owns or operates any type of real estate can benefit from using Cost Segregation!

HOW DOES IT WORK?

By identifying and placing the various individual assets purchased in a real estate transaction into their proper shorter 5, 7 or 15 year depreciation lives rather than on a 39 year life for commercial properties or 27.5 years as with residential rental property, you can reduce taxes by up to $70 thousand dollars per $1 million dollar's worth of assets invested! Use of an accelerated depreciation schedule gives you higher tax deductions in those early years of property ownership or allows you to “catch-up” on prior periods, keeping more actual dollars in your bank account. With our engineering-based approach report, you can take advantage of these missed tax benefits in the current year without amending past returns.

Most tax professionals will inform you that your purchase or construction of a commercial property results in a 39 year straight line depreciation (or 27.5 years for residential real estate properties). What they miss is that most properties are actually made up of numerous components, many of which can be depreciated over shorter periods of time!

Most professionals simply do not have enough experience or expertise to correctly execute cost segregation studies in accordance with US Code guidelines, so they miss out on potential benefits entirely! The recent changes in the tax code have made cost segregation more valuable than ever, so being aware of and taking full advantage is vital for building owners wanting to maximize their property investment.

Do you qualify?

Your property likely qualifies if it has been acquired or improved in the last 15 years for at least $250,000, or if you’ve had renovations of at least $100,000. IF you’ve had a renovation of at least $100,000, you may qualify for a Partial Asset Disposition which may result in a loss in addition to what has already been deprecated.

I encourage you to get a no-cost estimate of your tax benefit by filling out this form! Our reports are based on IRS tax law and provide the framework and support to take full advantage of those tax laws.

Why work with us?

Having a strong background in high finance techniques and strategies, we can help you most effectively utilize your cost segregation study in line with project financing. Understanding the intricacies of high finance is a crucial part in order to most effectively utilize cost segregation and other monetization techniques.

If your tax professional has questions on the strategy we are right here to answer those questions and work with them to facilitate the savings. Our expertise will help you make sense out of all aspects, no matter how complicated they may seem!

FAQ:

If I do a Cost Segregation Study, am I required to amend my tax returns?

No! You can perform a cost segregation study with a property acquired up to 15 years ago and take the missed tax benefits in the current year without amending your returns! A 3115 change of depreciation method form is prepared by us to be used by your tax professional.

Have recent changes in the tax codes affected the impact on Cost Segregation Studies?

YES! With the Tax Cuts and Jobs Act of 2017, the IRS brought back 100% bonus depreciation through 2022, meaning the items identified in the cost segregation study as 5,7, and 15 year building components can be fully deprecated resulting in a major tax reduction in 2022! 2023 is 80% and 2024 is 60%, still resulting in massive savings!

The removal of the original use requirement for buildings acquired and placed in service after September 27, 2017 means both new construction and the acquisition of an existing building can benefit from a cost segregation study. By performing a cost segregation study, you can take advantage of the first year depreciation on earlier life building components in new construction and acquisitions. With an existing building, this first year benefit can be as much as a 700% greater write off!

Isn’t Cost Segregation Risky?

Not even remotely when you work with us! We follow IRS tax codes and rulings to ensure a clear, concise process that is easy to follow and enacted by your tax processional. We provide audit protection with your study!

Is it expensive?

While standard pricing is $2,497 for residential and $4,997 for commercial (up to 4 units), larger or unique projects require a quick appraisal (“pricing upon request”). The tax benefits usually result in tax savings that are 10x to 30x the costs!

Cost Segregation Study Client Questionnaire

___________________________________________________________

General Information:

Company Name:

Legal Name: *

Address for Cost Segregation Study: *

Contact Person: *

Phone *

Email *

Ownership Structure:

Is the property owned by an individual, partnership, LLC, or corporation?

Individual

Partnership

LLC

Corporation

If owned by multiple entities, please provide the names and percentage ownership.

Property Information:

Property Address:

Street Address *

City *

State *

Zip Code *

Type of Property:

Commercial (Office, Retail, Industrial, etc.)

Residential (Apartments, Single-Family, Multi-Family)

Mixed-Use

Other (Please specify):

Purchase Details:

Purchase Date: *

Purchase Price: *

Was the property purchased as a new construction, existing building, or land with improvements? *

Construction Details (If Applicable):

Construction Start Date: *

Construction Completion Date: *

Total Construction Cost: *

Were there any renovations or improvements made after purchase? (If yes, provide details of costs and dates). *

Yes

Details of costs and dates

Ownership & Depreciation Information:

Year Placed in Service:

Date property was placed in service for business purposes. *

Ownership History:
- If the property has changed ownership, please provide previous ownership details and dates.

Previous ownership details and dates

Current Depreciation Method:

What is the current depreciation method applied to the property (MACRS, ADS, etc.)? *

Has the property been depreciated as 39-year (commercial) or 27.5-year (residential)? *

Previous Cost Segregation Studies:

Have you had a previous cost segregation study conducted on this property? (Yes/NO) *

Yes

If yes, when was it conducted, and by which firm?

Date Conducted:

Firm

Others Please Specify

Construction or Improvement Details:

Building Size and Layout:

Total square footage of the building: *

Number of floors: *

Are there any common areas or amenities? (E.g.,pool, gym, parking, etc.) (Yes/NO) *

Yes

Land Improvements:

Were there any costs associated with land improvements such as landscaping, parking lots, sidewalks, or fencing? (Yes/NO) *

Yes

Mechanical and Electrical Systems:

Provide any details related to HVAC, electrical systems, plumbing, elevators, or any specialty systems (data cabling, fire alarms, etc.). *

Building Components:

Interior Finishes: Please provide any details regarding floorings (e.g., carpeting, tiles), wall coverings, ceiling finishes, etc. *

Exterior Finishes: Roofing material, siding, windows, doors, etc. *

Major Equipment or Systems:

If applicable, list any significant machinery, kitchen equipment, or specialty systems installed that may need to be included in the study.

Financial Information:

1. Property Breakdown: Provide a breakdown of the purchase price, including land, building, and other allocations (e.g., equipment, land improvements). *

2. Detailed Cost Records: Provide cost records for construction, renovations, or tenant improvements. Include hard and soft costs if available (e.g., materials, labor, architect fees, legal fees). *

3. Cost Segregation Study Goal: What is the primary objective of this cost segregation study? (E.g., tax deferral, increased cash flow, etc.) *

Available Documentation

Do you have detailed invoices, contracts, and ledgers for construction, renovation, or purchase? *

Yes

Are architectural drawings, engineering reports, or construction blueprints available? *

Yes

Additional Information:

Tax Filing Information:

Fiscal Year-End:

What is your preferred depreciation schedule (e.g., 5, 7, 15 years)?

Do you intend to amend any prior-year tax returns based on the study results? *

Yes

Not Sure

Any Additional Notes or Special Considerations:

Is there any other information we should know about the property or your tax strategy?

Document Checklist (Please Attach files if Available):

Purchase contract and settlement statement

Architectural plans, blueprints, or site plans

Construction or renovation invoices and contracts

Property tax assessments and insurance valuations

Depreciation schedules from prior years

Any previous appraisals or cost segregation studies

Sign Off:

I confirm that the above information is accurate and up-to-date to the best of my knowledge.

Full Name *

Signature *

Clear

Date *

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