What is Cost Segregation?
The principle goal of a cost segregation study is to increase cash flow from constructed buildings, purchased properties and renovations by accelerating depreciation expense deductions. Through this analysis, the components of a building are reclassified into proper class “lives” according to government legislation, case law, and IRS revenue rulings/procedures. Substantial tax savings can be achieved by accelerating depreciation deductions. Why have I not heard about Cost Segregation before> Though it has been around, in its current form, since 1987; Cost Segregation was, for some time, almost solely offered by Big 4 accounting firms and a handful of large real estate consulting companies who serviced only the largest of clients. There were very few qualified practitioners and, for small to medium size taxpayers, the service was cost prohibitive. Within the last few years, however, Cost Segregation has become available, at a very reasonable cost, to smaller companies and individual pro
