Attention: Real Estate Rental Property Owners and Business Premises Owners
Are you aware of the Cost Segregation tax planning strategy to accelerate depreciation and improve cash flow?
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Essential for real estate investors and business owners who own their building
COST SEGREGATION STEPS
Analysis to determine if your investment property qualifies
Key documents (e.g. appraisal and inspection docs) needed
Conduct the Study
Onsite visit and review of key docs to sort depreciation types
Report Completion
Final determination of how much tax savings may be available
It's a professionally performed analysis of your building and its subcomponents (different systems) that deteriorate over time. A specific lifespan is assigned to these different building components, such lifespans thus having a shorter depreciation schedule compared to the building as a whole (i.e. 27.5 or 39 years). This results in an acceleration of the overall depreciation, providing higher short-term deductions and tax savings in the immediate timeframe.
Typically it takes $3,000-$15,000 to perform a cost segregation study, depending on the size and nature of the building - but it should be more than worth it due to the potential to save much more than that in taxes in the short-term.
The sooner it is done, the sooner the depreciation can be accelerated on the basis of the CSS analysis and conclusions. If rehab investment is planned on the building, it is strongly recommended to perform the CSS before the improvements are done.
Perhaps, although with a professionally performed CSS, you will possess the documentation needed to support your tax filings and claims for accelerated depreciation. It is important to use experienced engineers and accountants who are qualified experts with such studies. It is not advised to do it on your own without professional assistance.
If you (or your corporation, partnership, trust) own real estate purchased or built within the last 15 years, you can benefit from a CSS. Both residential and non-residential commercial properties are in scope for such a study.
It depends on the type and size of the property you own, as well as how quickly you can provided important paperwork and documentation to be reviewed. You can expect a CSS to normally take 30-60 days.
While a Cost Segregation Study does take significant time and money, it is typically a smart financial move. It is common to save many times more in taxes due to accelerated depreciation than the cost of the study.
How to get started
Next steps
Schedule an Intro Call
Your privacy is respected - no nonsense.