Cost Segregation
What is Cost Segregation?
Cost Segregation is an IRS-approved application by which commercial property owners can accelerate depreciation and reduce the amount of taxes owed. This savings generates substantial cash flow that owners often use to reinvest in the business, purchase more property, apply to their principal payment or spend on themselves.
How Does Cost Segregation Work?
Cost Segregation Services (CSSI), is an experienced and qualified company which performs the engineering-based cost segregation study on your property.
The study accelerates the depreciation of your building/renovation components into shorter depreciation categories such as 3-, 5-, 7-, 10- and 15-year, rather than conventional 27.5-, 31.5- and 39.5-year schedules. Five- and seven-year items might include decorative building elements, electrical for dedicated computer equipment, and carpet. Fifteen-year items might include site utilities, landscaping and paving.
This engineering-based cost segregation study results in much higher depreciation expense and significantly reduced taxable income for the property owner. Best of all, the IRS ruling states that cost segregation can be applied to categories of buildings purchase or built since 1986, including renovations, and there is no need to amend your tax returns.
