Cost Segregation Studies
Most tax returns include depreciation of personal property such as equipment and furniture over ﬁve or seven years. But many also miss out on other available federal and state tax beneﬁts by depreciating their entire investment in constructing or acquiring a building over 39 years. Such an oversight can cost you thousands of dollars in improved cash flow.
A cost segregation analysis identiﬁes speciﬁc building-related assets that also qualify for shorter federal tax depreciation lives. The cost segregation specialists at HBK work with businesses to ensure these opportunities are not missed.
A cost segregation study can lead to a substantial reduction in federal and state income taxes in the early years of a building’s life by accelerating tax depreciation deductions. As part of the cost segregation process, we identify the net present value of the resulting increased cash ﬂow over the life of the facility to ensure you of a cost beneﬁt. Our conclusions are based on sound tax principles and supported by IRS regulations, rulings and case law. Our team is highly qualiﬁed to identify opportunities for federal and state tax advantages for owners of commercial, industrial and rental real estate.
A cost segregation study should be considered if you are:
- Constructing a new building
- Purchasing an existing building
- Undergoing a renovation or expansion
- Constructing leasehold improvements
Cost segregation studies are one more way we work with you to create, grow and protect your wealth.