What is a cost segregation study?
A cost segregation study is a comprehensive analysis of constructed or acquired commercial buildings to identify hidden potential for accelerating tax depreciation deductions. Depending on the type of building and special design features, 15% to 50% of costs generally can be reclassified to shorter depreciable lives.
Is your building a candidate for a cost segregation study?
To be eligible, buildings must have been purchased, constructed, expanded or remodeled since 1986. To be cost effective, a cost segregation study typically should be conducted on buildings worth $500,000 or more.
If you have:
- A new building under construction
- An existing building undergoing renovation or expansion
- A leasehold improvement or fit out
- A previously owned property that you have acquired
Then, your building may be a candidate for a cost segregation study, which can help you save on taxes and improve your company’s cash flow.