What is a cost segregation study?
Cost segregation is a strategic analysis performed by a team of qualified professionals that identifies, segregates, and reclassifies property costs currently being depreciated over a longer term (such as 39 years) to shorter depreciable periods. This process allows businesses to take advantage of tax deductions that they would normally wait years to receive. Additionally, a taxpayer can utilize a properly prepared cost segregation study and reflect the tax benefits on a current return without amending prior year returns.
Why have a cost segregation study performed?
- Maximize Tax Savings: Most properties builtor acquired in 1987 or later may qualify for the valuable tax savings produced by a cost segregation study. Proper cost segregation studies involve a team of engineers who inspect the property, examine blueprints and categorize assets. The CPAs of CRI work with engineers to document all items eligible for accelerated depreciation and utilize the latest IRS procedures and revenue rulings to calculate the maximum depreciation deduction for each asset.
- Improve Cash Flow: Shortening the life of depreciable assets results in moving tax deductions into earlier years, thus, increasing your current tax deductions and improving cash flow.
Call the CPAs of CRI today for details about cost segregation studies and the potential tax savings and cash flow improvements for your business.