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Engineered Cost Segregation Study


Money doesn't grow on trees, but it could be hidden in the walls. Commercial Property purchases or renovations within the last 20 years can qualify for Federal Incentives. Average Tax benefit is $75,000 for every $1 million in purchase price, construction cost and renovations.

Minimum Requirements:

A Commercial Property that was purchased or built within the last 20 years, with $500K or more in cost OR, has renovations/improvements within the last 20 years of $250K or more in cost AND, has paid federal taxes within the last 3 years, or plans to in current year. 

What is Cost Segregation:

Cost Segregation is an engineering based study that permits commercial real estate owners to reclassify real property for depreciation purposes and reclassify it as more rapidly depreciating personal property. This reclassification results in significant cash flow benefits in both present and future years through considerably shorter depreciable tax life and accelerated depreciation methods.

Service Overview:

The Commercial Property benefit is a Federal program designed for business owners who own commercial properties, or have performed significant leasehold improvements.  This program traces it’s roots as far back as the Tax Reform of 1986, but went through significant changes in 2004 making it more accessible for small and midsize property owners to take advantage of.  The most recent changes appeared as late as February 2009 in the American Recovery and Reinvestment Act.  This is an engineered based program that focuses on the components of the building.  90% of all commercial properties qualify for this program.  Commercial Property Benefit provides an opportunity to significantly reduce federal taxes and improve cash flow.

Why doesn’t every building owner and CPA know this?

The answer is simple; it is not their area of expertise. Although some building owners and CPAs have substantial experience with Cost Segregation, most do not. There is a dearth of true educators in this field, which unfortunately leads to much misinformation. These factors have caused countless thousands of building owners to miss out on this powerful tax savings strategy.

Can Condos or Apartment Buildings Qualify?

Yes, they can!  Condominiums fall under a multi-family category which also includes properties such as apartments, hotels and residential-type facilities that house people either temporarily or for an extended time up to and including life.

Items Typically Reclassified:

  • Site Improvements (Landscaping / Parking)

  • Light Fixtures

  • Branch Wiring

  • Special Plumbing

  • Flooring

  • Millwork

  • Electric

  • Roofing

  • Partition Walls

  • Cabinetry 

  • Furnishings

  • Shelving

  • Wall Coverings

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