Ten Frequently Asked Questions About Cost Segregation

3 Minute Read
Posted by Quinn Badner, Real Estate Analyst on Dec 23, 2024 12:56:12 PM
What is Cost Segregation?

Cost segregation is a tax strategy that allows commercial property owners to reduce their tax liabilities by accelerating depreciation deductions.

Who Can Benefit From Cost Segregation?

Commercial or residential property owners who have recently constructed, expanded or purchased buildings can benefit from cost segregation services.

How Does Cost Segregation Work?

Cost segregation involves reclassifying building assets into shorter recovery periods to accelerate depreciation deductions.

What Are the Benefits of Cost Segregation?

Cost segregation services provide significant tax savings, increased cash flow, and reduced tax liabilities for commercial and residential property owners.

How Long Does a Cost Segregation Study Take?

The length of a cost segregation study varies depending on the size and complexity of the building, but typically takes several weeks to complete.

How Much Does a Cost Segregation Study Cost?

The cost of a cost segregation study also varies depending on the size and complexity of the building but is often a small percentage of the tax savings generated by the study.

Is a Cost Segregation Study Worth the Cost?

Yes, a cost segregation study can provide significant tax savings and increased cash flow for commercial property owners, making it well worth the cost.

Will a Cost Segregation Study Trigger an IRS Audit?

While there is no guarantee that a cost segregation study will not trigger an IRS audit, a quality cost segregation study that complies with IRS guidelines can provide supporting documentation in the event of an audit.

What is Bonus Depreciation?

Bonus depreciation is a tax incentive that allows businesses to immediately deduct a percentage of the cost of qualified property in the year it is placed in service.

Join Us!

Sign up for our free Cost Segregation 101 webinar on January 14th at 10:04 PST: Increase your Cash Flow

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Edited by Randy Eickhoff, CPA, Founder & Head Coach at Acena Consulting. Photo courtesy of airpix on Flickr.

Quinn Badner, Real Estate Analyst

Quinn Badner, Real Estate Analyst

Quinn Badner is a recent graduate of Loyola Marymount University where he received his Bachelor of Business Administration with a concentration in Entrepreneurship. Through networking, Quinn was able to focus on expanding his real estate knowledge and expertise, allowing him to provide the best services for clients while performing Cost Segregation Studies.