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Cost Segregation

Common questions we hear regarding the process.

COST SEGREGATION

It's simply a better way to manage cash flow.

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What is Cost Segregation?

Separating out personal assets for tax reporting purposes

Simply, Cost Segregation is the process of separating personal property that has been grouped or included in a building or other structure from real property for tax purposes.

A Cost Segregation Study utilizes tax rules to assign shorter asset lives to personal property, increasing the annual depreciation and thereby lowering the company’s net income and income taxes. Depending upon the size and type of building being built, expanded or purchased, a company can significantly reduce their tax burden in the first five years after placing the building in service. Paying fewer taxes today means more cash flow for investment, capital equipment, additional employees or working capital.

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Do I need a Cost Segregation Study?

If your company is building or expanding a building, parking structure or other real estate, a Cost Segregation Study can be completed as the building is being finished or after it is completed. However, getting a cost segregation professional involved during the development phase of the structure can help to increase the benefit of the study. How? While there are several tests that an asset much pass to be classified as either real or personal property, installing assets that are movable, detachable or removable can result in classifying the asset as personal property (with a much shorter tax life) than real property.

You can also perform a Cost Segregation Study on a building recently purchased in order to maximize your depreciation in the first few years after purchase. By completing the Cost Segregation Study early, the new building owner can enjoy lower taxes and more cash flow immediately.

If you have owned your building for a few years, you can still generate immediate value through a one-time “catch up” depreciation deduction by completing a Cost Segregation Study. The adjustment can be taken immediately and does not have to be spread out over several years.

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Do we qualify for a Cost Segregation Study?

See if you have the type of building that qualifies

Typically, buildings bought, constructed or expanded with a cost basis of greater than $500,000 will benefit from the increased depreciation.  

Building types include:

  • Airports
  • Golf Courses
  • Amusement Parks
  • Arenas
  • Apartments
  • Auto Dealerships
  • Big Box Retail
  • Neighborhood Centers
  • Breweries
  • Office Condominiums
  • Casinos
  • Food Processing Facilities
  • Distribution Facilities
  • Hotels & Motels
  • Gas Stations
  • Fitness Centers
  • Grocery Stores
  • Hospitals & Medical Buildings
  • Manufacturing Facilities
  • Office Buildings
  • Nursing Homes
  • Wineries
  • Resorts
  • Shopping Malls
  • Retail Buildings
  • Stadiums
  • Storage Facilities
  • Fast Food Restaurant
 

What our Clients Are Saying

See what just one of our many happy clients had to say

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"Efficient and Knowledgeable. Randy Eickhoff & Acena Consulting have always provided proactive, efficient and responsive service. In addition to their strong technical expertise, they bring new opportunities for additional tax savings that apply to our company. We appreciate their ability to be flexible to work within our culture to best fit our needs. " -H.S., CEO, Fast Growing Technology Co. Scottsdale, AZ

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