The Basics of Cost Segregation: What You Need to Know
The Basics of Cost Segregation: What You Need to Know
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Schedule a free cost segregation consultation to find out if a study could help your company save on taxes for the present and past tax periods. CorporateTaxAdvisors offers Cost Segregation Services.
Cost segregation is a tax-saving strategy that can help businesses save thousands of dollars each year. By separating the cost of a building into its various components, such as the building's structure, roof, and HVAC system, businesses can accelerate the depreciation schedule for those components. This can result in significant tax savings over the life of the asset.Benefits of Cost Segregation
There are a number of benefits to cost segregation, including:
Increased tax savings: By accelerating the depreciation schedule for building components, businesses can save thousands of dollars in taxes each year.
Increased sales tax exemptions: Cost segregation can help businesses increase their sales tax exemptions by identifying which components of their buildings are eligible for exemption.
Lower property taxes: Cost segregation can help businesses lower their property taxes by reducing the assessed value of their buildings.
Improved property records: Cost segregation can help businesses create a more accurate and comprehensive record of their property assets.
How Cost Segregation Works
Cost segregation is a complex process that should be performed by a qualified professional. A cost segregation study will typically involve a detailed analysis of the building's construction costs and a determination of the appropriate depreciation schedule for each component.
Once the cost segregation study is complete, the business can file an amended tax return to claim the additional depreciation deductions.
Representative Examples of Cost Segregation Studies and Tax Credit Work
Here are some examples of cost segregation studies and tax credit work that we have helped our clients with:
A manufacturing company was able to save over $1 million in taxes by performing a cost segregation study on their new manufacturing facility.
A retail company was able to increase their sales tax exemptions by $500,000 by performing a cost segregation study on their retail stores.
A property management company was able to lower their property taxes by $250,000 by performing a cost segregation study on their apartment buildings.
Conclusion
Cost segregation is a tax-saving strategy that can help businesses save thousands of dollars each year. If you are looking for ways to save money on your taxes, we encourage you to talk to a qualified cost segregation professional.
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