Money May Be Hidden in Your Walls

An engineering based cost segregation study is a powerful and strategic tool that can help property owners increase cash flow by accelerating federal tax depreciation of construction related costs. Opportunities exist not only for newly constructed buildings, but also for buildings that have been recently acquired or are undergoing renovation or expansion.
To be more specific, in a cost segregation study, an in-depth analysis is conducted to identify assets that are embedded in the building’s cost, but are eligible for a 5, 7 or 15 year depreciation for tax purposes, rather than the standard depreciation schedules of 39 years for commercial and 27.5 years for residential real estate. These assets are then reclassified allowing building owners to accelerate the depreciation of this property for tax purposes.

Examples of items that qualify for accelerated depreciation include:

  • Office furniture
  • Carpeting
  • Millwork
  • Architectural fees
  • Security systems
  • Ventilation and exhaust systems
  • Specialty electrical systems
  • Fencing

Reducing tax lives can significantly decrease your tax liability and increase your cash flow. Apex CPAs & Consultants, Inc. understands how important it is for our clients to take advantage of every tax opportunity. That is why we provide free feasibility analyses, helping you better understand the potential tax savings a cost segregation study could bring you.

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