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  Cost Segregation FAQ

What do you do?
I help commercial property owners substantially improve their cash flow by applying Cost Segregation to their properties.

What is Cost Segregation?
It is an IRS approved application by which commercial property owners can accelerate depreciation and reduce their taxes.

How?
Our firm has teamed up with, Cost Segregation Services, Inc. (CSSI), an experienced and qualified engineering company, which performs the cost segregation study on your property. The study accelerates the depreciation of certain building components into shorter life categories such as 5, 7 and 15 yrs instead of 39.
For example, your carpet, window treatments, certain computer cabling, special lighting, utility equipment or landscaping won't last 39 years.

How much can property owners save?
Every $1 million in building costs translates into $60,000 to $100,000 in tax savings and cash flow almost immediately.

How much does it cost to have this study done?
It depends upon the complexity of the business, the number of properties and total building costs. About $7,000 for a $1 million building or $10,000 for a $2 million.

Our fee structure is a one-time, flat rate fee encompassing all costs of the study including all internal costs, travel expenses, as well as full technical representation by our firm in the unlikely event of an audit. The cost of the study is based solely upon the size and complexity of each project and is determined by our team of engineers during the no cost, no obligation preliminary analysis we provide.

How long does the study take?
The entire process from Illustration, Demonstration of preliminary analysis at no-cost, Engagement Signing, Implementation to Completed Study Review with your CPA takes 6 to 8 weeks.

What types of properties are eligible for this application?
Engineered Cost Segregation studies are applicable for any commercial building with a building value in excess of $200,000. This methodology can be utilized for new construction, existing buildings, leasehold improvements, tenant fit-outs, building acquisitions, renovations, restorations, and additions. Cost Segregation studies can be applied retroactively to any property dating back to December 31, 1986, thus creating the potential for tremendous immediate refunds from the IRS.

Why hasn't my CPA told me about this?
Most CPA firms don't have engineers on staff to physically inspect the property, examine architectural/engineering drawings and analyze cost data. Accountants may be able to capture some of the deductions, but without engineering expertise they may overlook substantial portions of a building to achieve tax savings.