Cost Segregation Studies are used by corporate taxpayers to segregate the real and personal property costs in an effort to maximize federal tax depreciation deductions that would be based on shorter recovery periods. A comprehensive Cost Segregation Study evaluates all available information, including a tour of the facility, contractor invoices, vendor invoices, and construction drawings to provide an independent third-party analysis for an IRS audit review and will provide several potential benefits:
- Increased tax cash flow through accelerated depreciation deductions.
- Reduced income tax and may lower property taxes.
- Facilitated a claim to “catch-up” depreciation from misclassified assets.
- Provided building componentization to enable deductible asset retirements from repairs.
We perform cost segregation studies for a wide variety of facilities. For taxpayers in the Healthcare industry this may include for-profit hospitals, clinics, medical office buildings, and assisted living facilities. For taxpayers in the Life Science industry this includes offices, research, production, and warehouse facilities for biotech, medical device, diagnostic, and pharmaceutical companies. Our professionals have significant experience in developing customized approaches for a diverse range of complex projects and are experienced with Internal Revenue Service (IRS) reviews.
The ideal time for a Cost Segregation Study depends on your unique situation. Our professionals provide a complimentary evaluation of the potential benefit of a study and work closely with you and your tax advisor to determine the right solution relating to:
- Existing capitalized costs from property acquisitions, renovations, leasehold improvements, or recent construction.
- Applicable recovery periods, placed in service dates, and bonus allowance eligibility.
- Pre-construction planning to enhance depreciation and tax efficiency benefits.
With potential net present value benefits of a Cost Segregation Study, is your company taking full advantage of the complex IRS regulations to minimize taxable income?