What is cost segregation?

What property types are eligible for a cost segregation study? 

How much money can I save?  

What is the difference in accelerated depreciation and increased depreciation? 

Is cost segreation considered a red flag for an audit? 

Q. What is cost segregation?

A. The objective of a cost segregation study is to increase cash flow from  buildings, purchased properties and renovations by accelerating depreciation expense deductions. The components of a building are reclassified into lives in  accordance to government legislation and IRS rulings and procedures.

Q. What property types are eligible for a cost segregation study?

A. Amusement parks, apartments, auto dealerships, banks, car wash facilities, commercial buildings, day care centers, department stores, hospitals, hotels, office buildings, restaurants, supermarkets, theaters, etc...

Q. How much money can I save?

A. Savings depend on several factors such as: purchase price, building usage, design and year acquired.

Q. What is the difference in accelerated depreciation and increased depreciation?

A. Cost segregation precisely allocates asset value from longer-life to short-life commercial property; then chooses a method of depreciation (straight-line or accelerated). Unlike cost segregation, accelerated depreciation involves using a table that shifts a higher percentage of the depreciation deduction to the early years of an asset's life.

Q. Is cost segregation considered a red flag for an audit? 

A. Not necessarily. Cost segregation accurately applies IRS rules and guidelines. The report in a cost seg study can actually provide back-up records which tax payers can rely upon