What Is Cost Segregation?

Cost segregation is the separation of personal property from real property based on an engineering study, and it allows faster depreciation on certain building componets. This results in lower taxable income and increased cash flow up front.

Which Properties Should Have a Cost Segregation Analysis?

  • Property Valued Over $1,000,000
  • Property owned for less than 20 years
  • Property not intended for immediate disposition
  • Properties that are newly constructed
  • Owners seeking income tax deductions

What are the Advantages of Cost Segregation

  • Increased Cash Flow
  • Create Net Tax Savings
  • Ensure Proper Depreciation of Assets
  • Does Not Attract Audit Scrutiny
  • Frees Cash for Owners

What are the Costs of a Cost Segregation Report?

  • Free Preliminary Analysis*
  • Flat Fee for the report based on size of property **
  • Cost of report is Tax-Deductible
*A preliminary analysis can not be used in lieu of a cost segregation analysis. **Actual results are not guaranteed
The following table show the benefits of a cost segregation on prior projects
Project
1st Year Additional Deduction
1st Year Increased Cash Flow
NPV of Accelerated Depreciation
$15.2 million Hotel
(New Construction with 50% Bonus Depreciation)
$2,085,493
$729,923
$740,859
$15.2 million Hotel
(New Construction with 50% Bonus Depreciation)
$2,085,493
$729,923
$740,859
$15.2 million Hotel
(New Construction with 50% Bonus Depreciation)
$2,085,493
$729,923
$740,859
$15.2 million Hotel
(New Construction with 50% Bonus Depreciation)
$2,085,493
$729,923
$740,859
$15.2 million Hotel
(New Construction with 50% Bonus Depreciation)
$2,085,493
$729,923
$740,859