Business Services

Cost Segregation Studies

What is a Cost Segregation Study?

A cost segregation study is a comprehensive analysis that carefully breaks down construction and/or acquisition costs of a new or existing building and allocates them to specific categories - maximizing accelerated depreciation for qualifying building components.

The current depreciable life of real estate is 39 years for commercial facilities and 271/2 years for apartment buildings. Cost Segregation Studies allow taxpayers to separate different components of the total construction cost or purchase price and utilize much shorter depreciable lives for some of the following elements.

• Land improvements 15 years
• Furniture and fixtures 5 or 7 years
• Machinery and equipment 5 or 7 years

The cost segregation study identifies and substantiates the specific components that are eligible for this accelerated depreciation.

1. What Kind of Projects Qualify?
2. How Much Can I Save?
3. Does My Property Qualify?
    

To learn more about how a Cost Segregation Study can benefit you, contact Gerry Hedgcock, CPA.