| Cost Segregation is a strategic tax
planning tool that allows you to increase your cash flow and
accelerate your federal and state income tax depreciation
deductions on real estate you have purchased, constructed,
expanded, or remodeled (including landlord or tenant
improvements).
 A Cost
Segregation Study identifies, segregates, and re-classifies
all building costs that qualify for shorter depreciable
lives. Many costs that were originally classified in
residential or commercial real property categories, with a
depreciable life of 27.5 or 39 years can be re-classified
into personal property or land improvement categories with
shorter depreciable lives of 5, 7, or 15 years.
Examples of costs that may qualify as
your personal or land improvement property include
electrical and piping systems, decorative and special
finishes, lightings, wall coverings, partitions, and special
purpose equipment. These costs are moved into shorter
depreciable lives, thereby reducing your federal and state
income tax liability and increasing your cash flow.
Cost Segregation Studies are supported
by over 200 IRS and tax court rulings, including the
Hospital Corporation of America V. Comm. 109 TC 21 in 1997,
which provides legal support to use Cost Segregation Studies
for computing depreciation. |
