Cost Segregation Studies

Cost Segregation is an IRS-approved application of reclassifying components of real property improvements to personal property.

If you have at least a $200,000 commercial, industrial, investment residential, or leasehold improvement property purchased after 1986, you may qualify for a cost segregation study. At Innovative Property Tax Solutions, we feel every commercial and industrial property owner should be made aware of the benefits of a cost segregation study.

Cost Segregation is an IRS-approved application of reclassifying components of real property improvements to personal property. This process allows the assets to be depreciated on a five, six, or 15-year schedule instead of the traditional 27.5 or 39-year depreciation schedule of real property. This offers property owners the ability to accelerate depreciation and reduce the amount of taxes owed, increasing cash flow.

The American Society of CPAs and the IRS both recognize cost segregation as an important tax savings benefit. You don’t need to re-file a return to receive these benefits; however it does require a correction in accounting. The overall savings generate substantial cash flow by accelerating depreciation tables, money you can reinvest into your business, use for acquisitions, apply to principal payments, or even spend internally on employees.

The advantages of cost segregation studies are staggering.

View a Cost Segregation Study Example